Laundromat Resource Forums Financing Down Payment

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    • #4866
      Austin Sciullo
      Participant

      I am looking into buying my first laundromat and was talking to a distributor about financing. He informed me that a lot of lenders would like me to have some skin in the game with about 100k of my own money into the business. I’ve never started my own business so I was wondering if this seems right and are there any ways to not sink a lot of peronal money into purchasing a laundromat I’ve always heard of using other people’s money when starting a business.

    • #4895
      Jason Dodge
      Participant

      There are a ton of ways to finance these. I did a mix of personal money, seller financing, private funds and even my line of credit from my house to purchase my first laundromat. The more conventional route would be to have 30% down or something in that range. Find the right location and then make it happen. Sometimes the sellers will carry the note. If you can find other peoples money then go for it.

      • #5408
        L H
        Participant

        I had a similar question based on my experience so far.
        I figured I would need about 30%-40% for a downpayment to purchase an existing business but as I’m finding out sellers are asking for 50%-70% down just to talk about a purchase. Is this normal?

    • #4900
      Austin Sciullo
      Participant

      Thank you sir

    • #4901
      Emerson
      Participant

      Austin, I am kind of reading between the lines and comparing information but will take a stab or a guess.

      When talking to the distributor they were likely describing financing a new store “build”

      The amount named by the distributor you talked to is right about the cost to outfit the infrastructure. Electrical, plumbing, hooking up to the sewer system, fees etc.

      The “down payment” or skin in the game is paying for all of those infrastruture items while the funding company/ lender is most likely financing 100% of the equipment and related items.

      The approach Jason described is more. likely for buying an existing store and sounds like what you are asking about. Just to me the distributor’s answer sounds like for a new store.

    • #5065
      Bianca Mendoza
      Participant

      Why would you need to talk to a distributor? Im new to this, and I don’t own any laundromat. Im trying to read as much as I can about this industry, so bear with me.

      • #5083
        Divers Laundry
        Participant

        Hi Bianca,
        I agree with Jason if you are looking to purchase an existing store the best way forward would be to use personal funds, seller financing, and/or business lending. You would reach out to a Distributor if you were looking to start a new store as mentioned by Emerson. You would also speak to a Distributor if you were looking to purchase new equipment for an existing store.

    • #5593
      Bianca Mendoza
      Participant

      Hello Divers

      Thank you for the information!

    • #5688
      Jon dickey
      Participant

      Could you use a SBA loan for the 30-40% and seller financing for the remainder? Is that even possible?

      • #5750
        Kayla Labrum
        Participant

        I have this same question regarding SBA loan and seller financing! It seems like the best option for me.

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Laundromat Resource Forums Financing Down Payment