RIPON, Wis. — Whether you are a new investor entering the laundry industry or an experienced owner looking to reinvest in or expand your business, there are many options when it comes to selecting a financial lender.
While your first thought may be to turn to your bank or to the Small Business Administration (SBA), there is another answer: an equipment manufacturer.
With customized finance programs, as well as acquisition and equity financing, a lender that understands the industry will help your business succeed and maximize profitability.
IN-DEPTH INDUSTRY KNOWLEDGE
Not only have laundry equipment manufacturers been providing revolutionary equipment for many years, they’ve also been offering customized financing solutions that help set their customers’ businesses apart. Through this experience, they have an extraordinary understanding of the industry and will share this insight and expertise with you.
Their in-depth knowledge helps simplify the application process and decisions are made quickly. A manufacturer recognizes the value of the machines and the importance of reinvesting in your business. It also knows the impact replacing outdated equipment with new, state-of-the-art machines will have on a store owner’s bottom line.
Multi-store owner Mike Gilley, who has been in the industry for more than 25 years, owns 18 Laundromats throughout Kentucky and Indiana. He says he owes much of his success to working with Speed Queen® Financial Services (SQFS), who has helped fund his new equipment and stores over the years. In 1993, Gilley took out his first loan to replace outdated equipment.
“My first loan was around $30,000, which seemed like a lot of money at the time,” Gilley says. “Once the new equipment was installed, I quickly saw the benefits it provided, and my revenue began to rapidly increase. A few months later, I went back to SQFS so that I could replace even more equipment.”
A bank or agency that does not know the value of laundry equipment, how it works and what is needed to be successful in the industry has an extensive application process and requires a substantial amount of personal information and financial documentation that can take weeks or months to process.
If you’ve been in the industry and have a proven track record, you could be approved for a $250,000 financing loan with your manufacturer instantly once a brief application is completed.
“In 1995, I was ready to build my dream store,” Gilley says. “I went back to SQFS and because I had previously reinvested in my business and paid my loans on time, they gave me a significant loan to build the store. From that point on, I continued to partner with SQFS to grow my business.”
VARIETY OF PROGRAMS
There is more to financing in the laundry industry than obtaining funds to purchase new equipment. There are a variety of programs available that will meet your business needs, such as equity and acquisition financing.
Acquisition financing will provide a loan to acquire an existing Laundromat, as well as replace the equipment. Your manufacturer will also work closely with you and your distributor to determine what Laundromats for sale would be a smart investment opportunity.
If you’re a multi-store owner, a lender in the industry can use equity in an existing location — by evaluating current store value and income, as well as equipment — to finance a new store development or store acquisition.
Jake Gergues grew up helping in his family’s Laundromat in Jersey City, N.J., and took over the business in 2014. That year, he was interested in retooling and attended an event hosted by his distributor, Super Laundry. There, he met a SQFS representative who discussed financing options and showed Gergues how the new equipment would reduce utilities and boost profits. Since the equipment was installed, Gergues says he has exceeded revenue projections by 50%.
A couple years later, Gergues was ready to purchase a new store and turned to Super Laundry and SQFS.
“I met with SQFS to discuss the figures I would need to get the new store up and running,” Gergues says. “Matt Westphal at SQFS told me about the opportunity to use equity from our first business to fund the new store. As we started working on the second location, Westphal helped make everything so easy, and our success was his No. 1 concern.”
TAILORED TO YOUR NEEDS
A lender in the industry knows what it takes to be successful and will develop a finance program tailored to an investor’s specific needs and budget.
“When I built my first new store, the financing was structured with interest-only payments in the beginning,” Gilley says. “This allowed the business to ramp up and helped increase cash flow.”
Beyond the financial needs, your lender should be trustworthy. A lender in the industry will be invested in your success and business goals, and the relationship doesn’t end once the loan is approved. A full-service team of experts will personally manage your account, and also serve as a resource and trusted partner anytime you want to discuss new opportunities, such as expanding your portfolio.
“Westphal and his team are part of our business; I consider him a partner,” Gergues says. “If I was working with a bank, they would not be interested in my stores. They would not be familiar with some of the challenges that arise when you are opening a new store and therefore wouldn’t be ready with a solution.”
Whether you’re replacing equipment, acquiring an existing store, or building one from the ground up, your manufacturer’s financial experts will create a customized, flexible and timely program to best suit your cash flow, payment goals and the needs of your Laundromat.