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Dry Cleaners Loans: Options to Help Your Business Grow

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Updated October 03, 2022

If you are looking to expand or start a dry cleaning business, you should understand all of the safety regulations, required insurance and how to obtain financing. Dry cleaner loans may be the ideal way to cover your investment in large equipment and machines, cleaning solutions, conveyors, hangers, clothing covers, tagging systems, and ironing equipment.

Your investment could range from $30,000-$150,000 dollars depending on the size and scope of your business operation. Securing the right dry cleaning loan is crucial to a smooth start to your small business. Besides obvious purchases to start the business you may also need to use part of your loan to cover safety regulation concerns and insurance costs.

The first step is to find a dry cleaners loan you will qualify for as well as one that fits your unique needs. Here are a few options to consider:

Bank Options for Dry Cleaners

According to, traditional banks are not equipped to focus on small business loans any longer. The shift happened after the financial crisis in 2008, and the result is tough lending criteria and banks focusing on big business loan products. It simply isn’t profitable for them to provide loans of under $200,000 and unfortunately, that is what most small business borrowers, like dry cleaners, require.
Other concerns:

  • Banks often consider a dry cleaning business a high risk. There are perceived safety and environmental issues to be concerned about. In turn they demand collateral, guarantees and good credit to qualify.
  • Traditional banks typically will decline a loan if your business records demonstrate decreasing sales, low cash flow, or if you lack collateral or a significant amount of managerial experience.
  • According to, many banks turn away requests for a start-up loan because the business does not have the required three-year financial history to support its credit-worthiness.
  • The bank application is always very rigorous. You must present a very detailed business plan, proof of how you would ensure all safety regulations are followed, an analysis of your competition and your marketing plans, personal financial data and collateral, just to name a few items on the checklist.
  • If you qualify, you receive a relatively low interest rate, though the risky nature of the business may require you pay a balloon payment a few years into the term of the loan. Having a balloon payment may mean you will have to refinance the loan before its paid off and deal with another round of associated closing costs.

Small Business Association (SBA) Loans for Dry Cleaners

The SBA has specific programs set up for loans considered higher risk, like dry cleaning businesses. They are based on the value of your collateral, which could be the equipment required for your business as well as real estate property you own. A 90% loan to value is possible versus 70% or less with traditional bank sources.

The SBA is a government agency does not issue the loans themselves but connects the borrower to their lending partners and guarantees a portion of the loan. Because of this, there are some things you should know:

  • A down-side to an SBA loan, according to, is that if you need to move quickly on this opportunity, you are out of luck. An SBA loan can take up to 90 days or more to put into place and because they are a government backed program, the entire process is document intensive.
  • Your credit, resume, business plan and even your skills and ability to manage your dry cleaning business may also be scrutinized in the decision process for the loan.
  • A plan to address all safety regulations and insurance requirements may be required within the approval process

Alternative Lenders for Dry Cleaners Business

There are other options for a dry cleaning business loan. According to,, about two-thirds of small business borrowers seek alternative lenders as opposed to bank financing. The key is finding the right one for this type of business.

Small business lending companies can be a great alternative to traditional banks or the SBA. They offer loan products that align with your business needs not just their own requirements. Interest rates may be slightly higher than a bank, but are outweighed by the benefits, which include:

  • Typically, they look at what you are trying to build and your goals and find a loan product that works for you. In other words, loans for dry cleaners are based on more than just a credit score.
  • Alternative lenders often have the flexibility to offer several loan products, one of which will meet the needs unique to your business.
    Applications are typically fast, easy and provide you the money you need quickly.
  • Documentation is a fraction of what a bank or the SBA requires.


Some businesses, like dry cleaners, have very specific needs and funding challenges. For modern business funding solutions that fit your business, contact Credibly today!