Buy, Lease, or Finance: Some of the Best Ways to Acquire Commercial Laundry Equipment in the USA

Common Types of Commercial Laundry Equipment

Before determining how you'll pay for your commercial laundry equipment, it helps to understand what you'll need.

Typical commercial laundry equipment includes:

Main Equipment:

• Laundry systems
• Commercial washers and dryers
• Front-load washer units
• Top-load washers
• Soft mount washer extractor systems
• Stacked washer/dryer units
• Commercial dryers

Systems:

• Water heater systems
• Security system
• Electrical and plumbing
• Ventilation systems

Operational Support:

• Laundry carts
• Folding tables and stations
• Clothes racks
• Seating

Revenue Add-Ons:

• Card and coin-operated payment systems
• Change machines
• Vending machines, i.e., soap, fabric softener, dryer sheets, snacks, and soda machines

Options for Acquiring Commercial Laundry Equipment

Laundromat operators have three main choices for obtaining the equipment needed to run their businesses: leasing, buying outright, and financing. Each has advantages and disadvantages. Compare each option to figure out which is best for your business.

Option #1: Lease Commercial Laundry Machines

Many laundromat owners initially may choose to lease their commercial laundry machines instead of buying. Leasing spreads out your costs over time. You pay a fixed monthly amount instead of buying equipment upfront.

With a lease, the distributor specializing in commercial laundry solutions owns the equipment.

Many leasing companies provide you with three options at the end of the lease. You can either upgrade to new equipment, purchase the equipment, or return the equipment.

Leasing Advantages

Leasing offers greater flexibility and lower upfront costs. It also gives you faster access to the modern commercial laundry solutions customers expect.

Other benefits of leasing include:

1. Minimal initial capital required
2. Predictable monthly pricing
3. Easier upgrades to newer models
4. Reduced maintenance risk in some contracts

Leasing works well for:

1. New laundromat owners
2. Multi-housing operators
3. Businesses that are testing a new location

Leasing Disadvantages

Ultimately, you'll pay more over time with leasing, and you won't own your equipment, unless you buy it out.

Drawbacks include:

1. Higher long-term expense
2. Contract limits
3. Penalties for ending the contract early

Option #2: Buy Commercial Laundry Equipment Outright

If you have a large amount of cash, one option is purchasing the equipment for your laundromat outright. Some small business owners use their savings or even retirement accounts to start their businesses.

Advantages of Buying Outright

Buying gives you full ownership from day one, helping to build equity in your business. You also avoid additional recurring debt from monthly payments. This can be useful for getting future business loans or selling your business down the road.

Other benefits of buying outright include:

1. No monthly payments
2. No interest to pay
3. Full control over equipment upgrades
4. Ability to depreciate assets over time

Disadvantages of Buying Outright

The biggest downside is that you reduce any capital that you might have. Using your cash reserves for equipment can also limit spending in other areas of your business.

Other drawbacks include:

1. Large upfront cash expense
2. Reduced working capital
3. Limited flexibility for expansion

Option #3: Commercial Laundry Equipment Financing

Financing your commercial laundry equipment is often a good option between buying and leasing.

With financing, you'll end up owning the equipment, but you pay for it over time.

Advantages of Financing

Financing can preserve your cash while building equity in your business. In the end, the benefits of financing commercial laundry equipment far outweigh the costs.

Financing benefits include:

1. Ownership of the equipment
2. Lower upfront cost
3. Predictable monthly payments
4. Possible Tax advantages

Disadvantages of Financing

Financing has drawbacks, despite any benefits it provides. It creates immediate debt for your business. You'll need to budget your loan payments and ensure that each payment is made on time to maintain a healthy credit profile.

Other potential downsides include:

1. Interest expense on top of the cost of equipment
2. Must meet credit eligibility requirements
3. Liens to equipment

Commercial Laundry Equipment Financing Solutions

Most laundromat operators end up financing their commercial laundry equipment. The good news is that these types of loans are usually easier to qualify for because the equipment purchased becomes collateral for the loan.

Loan terms for equipment financing usually range from three to seven years, depending on the lender and the type of financing.

Commercial equipment financing options include:

1. Small Business Administration (SBA) Loans

SBA loans for laundromats are usually offered by approved SBA lenders. The advantages are lower down payments, competitive interest rates, and a longer time to pay off the loan.

The downside is that the SBA has made it more difficult to qualify for a loan. SBA loans usually take longer than other types of business loans to get approved and funded.

2. Equipment Loans

Nearly all lenders offer equipment financing, although the terms for the loan will differ between lenders.

Equipment loans can only be used for equipment purchases. So you can't use the funds for other business expenses, like working capital or real estate.

3. Lines of Credit

A line of credit can provide you with an approved credit limit from which you can draw as needed. You pay only on the line of credit you use, and the limit resets as the principal amount is repaid.

Lines of credit can be used for many business needs, ranging from equipment to emergency business expenses to growing your business and boosting cash flow.

4. Term Loans

A term loan is a flexible type of financing that you can use towards multiple business needs. With a term loan, you aren't restricted to using the funds solely on equipment. You can also use it for expanding your operations or boosting cash flow. restricted to using the funds solely on equipment. You can also use it for expanding your operations or boosting cash flow.

You'll usually need to be in business for at least 18 months, have an annual revenue of $250,000, and a credit score of at least 650 for a term loan.

5. Revenue-based Financing

Revenue-based financing is a specialized financing option offered by some alternative lenders. You receive a lump sum amount in exchange for some of your laundromat business's future receivables.offered by some alternative lenders. You receive a lump sum amount in exchange for some of your laundromat business's future receivables.

Credit score requirements are generally much more lenient than with other types of financing, meaning that even if you've previously had bad credit, you may qualify for financing. You can also often receive funding fairly quickly, sometimes within a day or two, with revenue-based financing.

Buying Outright, Leasing, or Financing: What's Best for Your Business?

There's no universal answer when it comes to buying, leasing, or financing commercial laundry equipment. The right choice depends on your available capital, cash flow needs, and long-term growth plans.

Established operators with strong cash reserves may benefit from buying outright to minimize total costs, while newer businesses or operators entering a new market may prefer leasing for its lower upfront commitment and flexibility.

Financing offers the most practical middle ground for many laundromat owners. It provides equipment ownership without depleting working capital. This allows revenue from the machines to help cover monthly payments.

You can also use cash flow to invest in marketing, staffing, maintenance, unexpected repairs, or other laundry needs while still building equity in the business over time.

Evaluate how each option affects cash flow, tax planning, and scalability. Then, choose a solution that reduces financial pressure and positions your laundromat for sustainable, long-term profitability.