Has anyone purchased a laundromat?

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July 07, 2025

by an investor in United States

For someone who has recently purchased a laundromat, how did you determine the valuation of the business as these are primarily cash based businesses?
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Reply by a professional
from University of Michigan in Detroit, MI, USA
Herein lies the issue with this type of business. If you need to secure a loan to fund the acquisition, the tax returns are king. And if the seller has been less than honest about how much the business makes when filing taxes, there will be a gap between the valuation according to the financials and the amount a lender will lend. This is on the seller. They can't have it both ways (pay less tax and sell the business for more). So either the purchase price has to come down to match the tax returns or the seller has to finance the valuation gap.
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Reply by a lender
from University of Missouri in Denver, CO, USA
For SBA, we would still go off the tax returns. If they didn't report the income, we can't give them the benefit of the income.
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