In 2017, laundromats and dry cleaners generated $14 billion of revenue and employed nearly 200,000 workers across the U.S. While the industry has faced serious threats due to shifting consumer preferences and an increase in in-home laundry machines, there’s still a huge demand for laundry and dry cleaning services, especially in certain markets. So, if you currently own or are looking to open a dry cleaning business or laundromat, and you want a loan to grow your company, getting SBA financing could be a great choice.
SBA 7(a) Loans Can Be A Great Choice for Laundromats and Dry Cleaning Companies
The Small Business Administration’s SBA 7(a) program guaranteed more than $25 billion in loans during 2017, helping thousands of business across the U.S. The 7(a) program is incredibly versatile, allowing borrowers to use loan funds for a variety of purposes, including financing equipment, funding working capital, and purchasing owner-occupied commercial real estate.
Computer and electronics repair companies can use SBA 7(a) loans for:
Working capital: Paying utility bills, employee salaries, and other regular expenses can be a challenge for computer repair companies, especially if they’re going through a rough patch. Fortunately, SBA 7(a) program permits up to 10-year terms for working capital loans, helping businesses get the cash they need to stay afloat.
Refinancing eligible business debt: If you’ve already taken out a loan to fund your computer repair business, and the high interest rate is cutting into your monthly cash flow, you may be able to refinance it with an SBA 7(a) loan.
Expanding your computer repair business: If you want to build a new location, the 7(a) loan provides commercial real estate loans with terms of up to 25 years.
Purchasing equipment: Computer repair equipment can be costly, but getting a SBA 7(a) loan can help cover some of the costs.
SBA 7(a) Financing Can Also Be Great for Laundry Delivery Services
With the rise of disposable income in recent years, laundromats and dry cleaning companies are facing significant competition from laundry delivery services, which pick up and drop off laundry directly to and from a customer’s home. If you’re looking to start a laundry delivery service— or you want your current laundry company to expand into the laundry delivery business, an SBA 7(a) loan could be a great way to achieve your goals.
Other Types of SBA Financing for Laundromats and Dry Cleaners
SBA 7(a) loans can be a fantastic choice for many laundromats and dry cleaning companies, but they’e far from the only SBA loan option on the market. For example, SBA microloans could be a superior choice for some laundry businesses, as they have somewhat lower credit requirements than 7(a) loans. SBA microloans have a maximum loan amount of $50,000, and some lenders will offer them to borrowers with credit scores as low as 575. Another popular option is the SBA Express loan, which can close in as little as 30-45 days. Express loans offer amounts of up to $350,000, and require significantly less paperwork than 7(a) loans, making them a great option for businesses who need cash, but can’t afford to wait more than several weeks to get it.