You Don’t Have to Buy Equipment Outright
A full set of commercial laundry equipment costs $100,000 to $300,000. Most people don’t have that sitting in a checking account. The good news is that laundromat equipment is one of the easiest things to finance in small business because the machines are durable, have long useful lives, and serve as their own collateral.
Here’s every financing option available in 2026, what they actually cost, and which one fits your situation.
Financing Options Compared
| Option |
Interest Rate |
Term |
Down Payment |
Best For |
| SBA 7(a) Loan |
6-10% |
10-25 years |
10-20% |
Full startup (equipment + buildout) |
| SBA 504 Loan |
5-7% |
10-20 years |
10% |
Real estate + equipment over $500K |
| Equipment Loan |
7-12% |
5-7 years |
10-20% |
Equipment-only purchase |
| Manufacturer Financing |
8-15% |
3-7 years |
0-10% |
Buying from one brand |
| Equipment Lease |
10-20% effective |
3-7 years |
$0 |
Preserving cash, testing location |
| Business Line of Credit |
8-18% |
Revolving |
N/A |
Supplemental funding, repairs |
SBA Loans: The Gold Standard
SBA 7(a) Loan
The SBA 7(a) is the most popular loan for laundromat startups. The Small Business Administration doesn’t lend directly — they guarantee a portion of the loan, which makes banks more willing to lend to small businesses.
Pros: Lowest rates (often 6-10%), longest terms (up to 25 years for real estate, 10 years for equipment), can cover equipment plus buildout plus working capital in a single loan.
Cons: Slow process (45-90 days), extensive paperwork, requires a solid business plan, personal guarantee required, may require collateral beyond the equipment.
You’ll need: 680+ credit score, 10-20% down payment, detailed business plan with financial projections, 2-3 years of personal tax returns, personal financial statement.
SBA 504 Loan
The 504 program is designed for larger projects involving real estate or major equipment. If you’re buying the building along with the business, a 504 loan can cover up to 90% of the project cost with favorable terms.
Best for: Projects over $500,000 that include real estate acquisition. Not practical for equipment-only purchases.
Equipment Loans
Equipment loans are secured by the equipment itself. If you default, the lender repossesses the machines. This makes them easier to qualify for than unsecured loans, but the terms are shorter (typically 5-7 years).
Typical terms:
– Loan amount: $25,000 to $500,000+
– Interest rate: 7-12%
– Term: 5-7 years
– Down payment: 10-20%
– Approval time: 1-3 weeks
Monthly payment example: A $200,000 equipment loan at 9% for 7 years = approximately $3,200/month.
Equipment loans are available from banks, credit unions, and online lenders like Balboa Capital, National Funding, and CIT. Online lenders are faster but typically charge higher rates.
Manufacturer Financing
Most major commercial laundry manufacturers offer financing programs through partnerships with lenders. Speed Queen has Alliance Financial, Dexter has in-house financing options, and Continental Girbau works with several financing partners.
Pros: Streamlined application (your distributor handles it), sometimes promotional rates on new equipment, low or no down payment options.
Cons: Locked into one brand, rates can be higher than bank financing (8-15%), typically shorter terms (3-5 years), and promotional rates may be introductory only.
Manufacturer financing makes sense when you’re buying a full equipment package from one brand and the distributor offers competitive terms. Always compare with bank/SBA rates before committing.
Equipment Leasing
Leasing is renting the equipment for a fixed monthly payment. At the end of the lease, you either return the equipment, buy it at fair market value, or buy it for $1 (depends on lease type).
| Lease Type |
End-of-Lease |
Monthly Payment |
Total Cost |
| $1 Buyout |
You own it for $1 |
Higher |
Most expensive |
| Fair Market Value |
Buy at FMV or return |
Lower |
Moderate + buyout |
| Operating Lease |
Return equipment |
Lowest |
No ownership |
The math on leasing isn’t great for laundromats. A $5,500 washer on a $1 buyout lease at effective 15% over 5 years costs roughly $130/month, or $7,800 total — 42% more than paying cash. Over a full store of 30 machines, that premium adds up to $60,000+.
Leasing only makes sense if you’re testing a new location and aren’t sure it’ll work, or if preserving cash for buildout and working capital is critical. For established operators doing a retool, financing is almost always a better deal.
How to Choose the Right Financing
New Store, Strong Credit (700+)
Go SBA 7(a). The low rates and long terms make it the cheapest money available. Yes, the process takes time. Start the application 90 days before you need the money.
Equipment Upgrade, Good Credit (660+)
An equipment loan is fastest and simplest. You can get approved and funded in 1-3 weeks. The equipment secures the loan, so underwriting is straightforward.
First Store, Limited Capital
Manufacturer financing with low or no down payment gets you in the door. The rates are higher, but you preserve cash for rent deposits, buildout, and working capital. Once established, you can refinance at better rates.
Uncertain About Location
A lease lets you test the waters without a long-term equipment commitment. If the location doesn’t work, you return the equipment instead of being stuck with machines you need to sell at a loss.
What Lenders Want to See
Regardless of which path you choose, be prepared with:
– Personal credit score (680+ for best rates)
– Personal financial statement (assets, liabilities, net worth)
– Business plan with financial projections (for startups)
– 2-3 years of tax returns (personal and business if applicable)
– Lease agreement for your laundromat space
– Equipment quotes from distributors
– Down payment (10-20% for most options)
For a complete picture of your total capital needs beyond equipment, check our laundromat startup cost breakdown. And for current machine pricing to include in your loan application, see our commercial washer and dryer pricing guide.
Frequently Asked Questions
What credit score do I need to finance laundromat equipment?
For the best rates (SBA loans, traditional bank loans), you’ll want a 680+ credit score. Equipment loans from online lenders may approve scores as low as 600, but rates will be significantly higher (15-25%). Manufacturer financing programs vary but generally require 640+.
Can I finance used laundromat equipment?
Yes, but it’s harder. Most lenders prefer to finance new equipment because it has a longer useful life and better collateral value. For used equipment, expect higher rates, shorter terms, and larger down payment requirements. Some lenders won’t finance equipment older than 7-10 years.
How much down payment do I need for laundromat equipment?
Typically 10-20% for most financing options. SBA loans require 10-20%, equipment loans require 10-20%, and manufacturer financing may offer 0-10% down. Leasing often requires no down payment but may charge first and last month’s payment upfront.
Is it better to lease or finance laundromat equipment?
Financing (buying with a loan) is almost always cheaper than leasing over the total life of the equipment. Leasing costs 20-50% more when you add up all the payments. However, leasing preserves cash and provides flexibility if you’re uncertain about a location. For most established operators, an equipment loan or SBA loan is the better financial choice.