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Fundamentals of Funding (Conclusion)

A primer on applying for credit to fund coin laundry projects

CHICAGO — Establishing a coin laundry business can be a daunting process.

From site selection to equipment consideration, a lot of thought and preparation goes into the overall life of a Laundromat.

The foundation under all of these decisions stems from how much capital an operator has to help grow his/her coin laundry business.

Whether an existing operator, or a new investor, applying for credit to fund coin laundry projects can also be an intimidating process.

What financing options do operators have in today’s market and, once a lender has been chosen, what key documents do they generally require from a borrower?

American Coin-Op reached out to experts in the financing industry to answer questions like these to ensure that coin laundry operators understand the ABCs of funding.


Once a borrower is approved for a loan, typically, the lender will provide a letter of approval outlining its terms, according to Carol Dang, vice president of sales and marketing at Valley Village, Calif.-based Elite Business Investments.

“Once you get this letter, start preparing all the documents that the lender is requesting and any other conditions that will need to be met,” she says.

Once these documents and conditions are complete, the lender will prepare and send the loan document, which Dang explains should be read carefully.

“Make sure that names, addresses, and the terms are correct,” she says. “Some documents will require a notary, others may require a witness, so make sure that you know which documents need to be witnessed or notarized.”

Dang also suggests keeping copies of these documents before sending them back to the lender.

“Once the lender receives the documents, they will typically have their legal department review them prior to funding.”


In the event an application gets rejected, what options does a borrower have?

“Speak with the lender and analyst who denied financing to see what, if any, other options may be available,” says Matthew Westphal, financial services manager for Alliance Laundry Systems. “Many times, by offering a down payment or other collateral, an operator will be able to secure financing to get the overall deal approved.”

Other options, according to Jim Freeze, president, Dexter Financial Services Inc., include “reducing project scope, providing a larger down payment, adding a business partner [or] co-signer, or borrowing from family.”

Dang also advises operators to explore other choices with the lender.

“If that is all negative, and if you are looking for equipment, talk with the distributor and see if there are any options that they may be able to help you with,” she says. “Perhaps the manufacturer may be willing to help with the financing.”

“If you are looking for acquisition financing, going back to the seller and asking them to carry all, or a part, of the loan may be an option,” she adds.


To ensure the loan application and overall laundry project’s process goes smoothly, Westphal advises operators to assemble a team that includes a “knowledgeable distributor,” “a manufacturer that provides reliable equipment,” and a “finance company that not only understands the laundry industry, but your goals and long-term business plans.”

Full understanding of the capital that’s needed to be borrowed is important for Dang.

“The hardest thing for a borrower is to apply for a loan in one amount, and then find out that they are going to need more and have to re-apply for a higher amount,” she says.

Robert “Bob” Rinaldi, vice president, Milnor Capital, adds, “Understand the financial implications for the money you are borrowing. Know fairly certain the revenue that the business will earn on the equipment you are buying, for example.”

For Freeze, accuracy in the application is paramount.

“Submit a complete and accurate credit application package, and then be prepared to tell your story,” he says.

“Doing these two things will demonstrate that you’ve done your homework and allow your lender to efficiently perform the underwriting process, including offering a structure that best meets your financing needs.”

Missed earlier parts of this story? You can read them now here: Part 1, Part 2            

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(Photo: ©iStockphoto/OlgaLIS)

Have a question or comment? E-mail our editor Bruce Beggs at [email protected].