SBA lenders approved 470 7(a) loans to drycleaning and laundry services (other than coin-operated) from October 2023 through June 2026, $243,666,300 from 142 lenders. The median loan was $275,500 against $150,300 nationally, at a median rate of 10%, below the national 10.25%. Acquisitions made up 28.7% of loans against 10.4% nationally, at a median of $425,000. Lenders decide these loans on the plant's environmental history, the condition of its equipment, and whether reported sales match the deposits in a business that still takes cash.
| Measure | Drycleaning and Laundry Services (except Coin-Operated) | All industries |
|---|---|---|
| SBA 7(a) loans approved | 470 | 162,355 |
| Median loan | $275,500 | $150,300 |
| Middle half of loans | $100,000 – $541,850 | $50,000 – $500,000 |
| Loans of $1 million or more | 14% | 12.9% |
| Median rate at approval | 10% | 10.25% |
| Middle half of rates | 9% – 11% | 9.3% – 11.25% |
| Acquisitions (change of ownership) | 135 (28.7%) | 16,849 (10.4%) |
| Median acquisition loan | $425,000 | $693,000 |
| Lenders that made these loans | 142 | 1,648 |
| SBA 504 loans (real estate, equipment) | 27 | 16,714 |
Approvals FY2024 – FY2026 to date (1 Oct 2023 – 30 Jun 2026), cancelled loans excluded. Source: SBA 7(a) and 504 FOIA loan records, as of June 30, 2026.
- SBA 7(a) loans approved
- 470 (Oct 2023 – Jun 2026), from 142 lenders
- Median loan
- $275,500 (national $150,300)
- Median rate at approval
- 10% (national 10.25%)
- Acquisitions
- 135 loans (28.7%), median $425,000 at 9.75%
- SBA Express
- 23.2% of loans
- SBA 504
- 27 loans, median $864,000
The figures: an industry that changes hands
NAICS 812320 covers dry cleaning plants, drop-off stores that send garments to a central plant, wash-and-fold and pickup-and-delivery laundry services, and the alterations and pressing work that goes with them. Self-service laundromats are a separate code; see SBA loans for coin-operated laundries.
| Figure | Drycleaning and laundry | What it means |
|---|---|---|
| Loans / total / lenders | 470 / $243,666,300 / 142 | About three loans per lender |
| Median loan | $275,500 | Well above the national $150,300 |
| Middle half of loans | $100,000 to $541,850 | Few very small loans |
| 90th percentile | $1,278,400 | Likely multi-store operators and plants with real estate |
| Loans of $1 million or more | 66 (14%) | About one in seven |
| Median rate (middle half) | 10% (9% to 11%) | A tight range, below the national 10.25% |
| Fixed-rate share | 10.2% | Almost all variable |
| SBA Express | 23.2% | Most loans go through standard 7(a) |
| Start-ups / franchises | 8.1% / 5.5% | Few new plants; mostly independents |
| Acquisitions | 135 (28.7%), median $425,000 at 9.75% | Nearly three times the national 10.4% share |
| Median jobs supported | 6 | Counter staff, pressers, a spotter |
The pattern is clear. Few people open a new dry-cleaning plant, 8.1% of loans went to start-ups, but many buy one: 135 loans financed a change of ownership. Owners who built plants decades ago are retiring, and buyers, including operators adding a store or a route, are taking them over. The low SBA Express share, 23.2%, fits that picture: acquisitions with environmental diligence are standard 7(a) work, not quick small loans.
The environmental question
Dry cleaning has long used chlorinated solvents, above all perchloroethylene, and decades of spills, leaks and disposal practices left contamination under many plant sites. Cleanup can cost more than the business is worth, and liability can reach the owner of the property and, in some cases, the operator. SBA treats dry cleaning as an environmentally sensitive use, and lenders treat it as the first question in the file, not the last.
| Situation | What the lender will usually want | Why |
|---|---|---|
| Buying the building a plant operates in | An environmental investigation, usually beginning with a Phase I site assessment and often going further | The real estate is collateral, and contamination can make it worth less than the loan |
| Buying the business, leasing the site | The environmental history of the site, the landlord's position on contamination, and the plant's compliance records | Operators can carry liability, and a landlord dispute can end the lease |
| A drop-off store with no cleaning on site | Confirmation that no solvent cleaning has taken place at the location | Much lower risk, but lenders still check the history |
| A plant that has switched solvents | When the switch happened and what was used before | Past perchloroethylene use is what matters, not today's machine |
Perchloroethylene is also under growing regulatory restriction, and many plants have moved to hydrocarbon, silicone-based or wet cleaning systems. A lender will ask what the plant runs today, how old the machine is, and what it would cost to replace. A buyer should budget for that replacement if the seller has not made it.
Order the environmental work early. A dry-cleaning deal that learns about contamination after the letter of intent usually has to be renegotiated or abandoned.
Buying a dry cleaner
The 135 acquisition loans had a median of $425,000 at a median rate of 9.75%. What the buyer is paying for is a customer base with habits: people who drop off shirts at the same time every week, commercial accounts such as hotels, restaurants or uniforms, and a route that picks up from offices or homes. Those relationships usually transfer well if service stays the same, which is part of why dry cleaners change hands so often.
The usual difficulty is the numbers. Many dry cleaners still take cash, and the seller's tax returns may show less income than the seller claims the store produces. SBA lenders lend on what the returns and the deposits support, not on a seller's explanation. See seller financials vs tax returns. Point-of-sale records that tie ticket counts to deposits are the best evidence a buyer can put in the file.
The SBA rules for a complete change of ownership apply. The buyer injects at least 10% of total project costs; a seller note can count toward up to half of that only if it is on full standby for the life of the loan; SBA prohibits an earnout to the seller; and where the amount financed, less appraised real estate and equipment, exceeds $250,000, an independent business valuation is required and the loan cannot exceed it. The seller may consult for up to 12 months, or up to 24 months under SOP 50 10 8.1 from 1 October 2026, which matters in a business where the seller often knows how to fix every machine. From that date the purchase must also show 1.25x debt service coverage on historical results, and financial due diligence is required on every change of ownership. See financing a dry cleaner acquisition and buying from a retiring owner.
Most dry cleaners lease. The lease must be assignable to the buyer and should run long enough to support the loan; landlords of former plant sites sometimes use an assignment to raise environmental terms. See lease assignment in an acquisition.
Plants, stores and buildings
A dry-cleaning business is often one plant feeding several drop-off stores, sometimes with a delivery route. Lenders underwrite the plant, because that is where the equipment, the environmental exposure and most of the cost sit, and then look at whether each store earns its rent. An operator adding a drop store is taking modest risk; one building a second plant is taking much more.
Twenty-seven SBA 504 loans went to the industry, at a median of $864,000. 504 finances owner-occupied real estate and long-life equipment, typically 50% from a bank, 40% from a CDC and 10% from the borrower, with 15% required for a new business or a special-purpose property. The business must occupy at least 51% of an existing building. A property with a dry-cleaning history carries the environmental diligence above into the 504 process as well. See SBA 7(a) vs 504.
Preparing the file
The SBA list applies: business tax returns for 2–3 years, a P&L and balance sheet with a year-to-date P&L through last month-end, a debt schedule with copies of notes being refinanced, and personal tax returns and a personal financial statement for each owner of 20% or more, each of whom personally guarantees the loan. For an acquisition, add the target's latest full year of figures and the letter of intent. For a dry cleaner, add:
- Any existing environmental reports on the site, and the history of solvents used there
- Permits and compliance records for the plant's cleaning equipment
- An equipment list: cleaning machines with age and solvent, boiler, presses and finishing equipment
- Point-of-sale reports tying ticket counts and sales to bank deposits
- Revenue from commercial accounts and delivery routes, shown separately
- Every lease, with remaining term and the landlord's consent to any assignment
Cash flow is tested at SBA's minimum of 1.15x debt service coverage, and 1.0x globally including the owners' personal obligations. See global cash flow. Transparent builds the full lender package — financing model, lender presentation, blind teaser and underwriting memo — in a day once the documents are in, and takes it to the 278 lenders in its book that write SBA 7(a) and 504. On SBA loans the lender pays Transparent, not the borrower.
Common questions
- Can I buy a dry cleaner with an SBA loan?
- Yes, and it is the most common use of SBA money in this industry: 28.7% of loans from October 2023 to June 2026 financed a change of ownership, at a median of $425,000. Expect environmental diligence on the site, a close look at how reported sales tie to deposits, and at least 10% equity.
- Do I need a Phase I environmental report to finance a dry cleaner?
- Where the real estate is collateral, expect the lender to require an environmental investigation, usually starting with a Phase I, and often more for a site with a history of solvent cleaning. Where the business leases, lenders still ask about the site's history and the plant's compliance. The lender's environmental policy sets the exact requirement.
- My dry cleaner is mostly cash. Will lenders count that income?
- Only what the tax returns and bank deposits support. SBA lenders underwrite from filed returns, and income that was not reported cannot be added back. Point-of-sale records that reconcile to deposits help show the business as it really is.
- How much do SBA lenders lend to dry cleaners?
- The median 7(a) loan was $275,500 against $150,300 nationally, with the middle half between $100,000 and $541,850 and 14% of loans at $1 million or more. The median rate was 10%.
- Does switching away from perchloroethylene help my loan?
- It helps with the plant's future, and a lender will note a modern machine. It does not erase the site's history: environmental diligence looks at what was used there in the past, not only today.