Laundromat ROI and Cash-on-Cash Calculator
This laundromat ROI calculator counts all cash invested — injection, closing costs, working capital, reserves, and immediate capex — and computes cash flow after debt service, after valuing your own labor, and after a replacement reserve. It also stress-tests coverage against a revenue decline. Nothing is stored.
Key takeaways
- Three cash-on-cash figures, all honest, depending on whether you count the replacement reserve and your own wages.
- Injection is computed on total project cost, not purchase price — the SBA minimum is 10% of the project (Source: SBA SOP 50 10 8).
- DSCR is flagged below 1.25, the threshold many lenders apply after striking unsupported add-backs.
- The downside test applies a revenue decline at your contribution margin, because rent and much of the utility base are fixed.
- Runs entirely in your browser. No transmission, no logging, no form submission.
How the Calculation Works
Total project cost is purchase price plus closing costs plus working capital plus any capital spending funded in the loan. This matters because the SBA equity injection requirement — at least 10% on a complete change of ownership — is calculated on the project, not the price. Buyers who budget 10% of the purchase price are consistently short.
Total cash in is the injection plus any reserve you hold outside the loan. Closing costs, working capital, and funded capex are already inside the project and therefore inside the injection calculation.
Cash flow starts from normalized SDE, then subtracts the market value of your own labor, then debt service, then a replacement reserve. Each subtraction is a real economic cost, and each one is routinely omitted from advertised returns.
DSCR is cash flow before debt service divided by annual debt service, computed after your labor is deducted — which is how a lender computes it, because they assume someone has to run the store.
The downside test applies a revenue decline at the contribution margin you specify. A laundromat's rent and much of its utility base are fixed, so a large share of any revenue swing reaches earnings directly. That is what makes the upside real when volume grows and the downside sharp when it does not.
Why Three Cash-on-Cash Numbers
| Figure | What it answers | When to quote it |
|---|---|---|
| After debt service | What the business produces for you before reinvestment | Comparing operating performance |
| After the replacement reserve | What you can actually take out and keep | The most conservative and most honest default |
| Counting your labor as income | What an owner-operator experiences in their bank account | Only when you state that it includes wages |
All three describe the same store. Listings quote the third and call it a return; underwriting uses the first two.
Setting the Inputs Honestly
Normalized SDE should come from the filed tax return, with a source document behind every add-back. Test what happens when a lender strikes $10,000 of unsupported add-backs — that single change often moves DSCR across the approval threshold.
Owner hours is the input buyers most often set to zero and most often regret. Collections, cleaning oversight, repairs coordination, supplies, pricing, and customer problems are real hours even at an unattended store. If you genuinely will not do them, set the hours to zero and add the cost of the people who will.
The replacement reserve should reflect the equipment schedule, not a rule of thumb. The CLA's valuation discussion frames retools on a 15-20 year horizon and notes they can exceed $200,000, so a store with a fleet halfway through its life is accruing a real liability every year whether or not anyone books it.
The contribution margin defaults to 62%, meaning roughly 38 cents of each revenue dollar is variable cost. Adjust it from the store's own cost structure: separate genuinely variable costs (utilities partly, supplies, card fees, some labor) from fixed ones (rent, insurance, base utilities, most payroll if attended).
The interest rate should be a quote you were given, not an SBA ceiling. The program caps variable rates at base plus 3.0% above $350,000, but that is a maximum, not an offer.
What This Calculator Cannot Tell You
- Whether the SDE figure is real. It takes your input at face value; a lender will not.
- What the exit is worth. Cash-on-cash ignores resale, which for a laundromat is a large part of the return, and exit value depends on the lease term remaining when you sell.
- When the machines fail. The reserve is an average; failures cluster.
- What a competitor will do. New capacity in the trade area does not appear in any input here.
- Your tax position. All figures are pre-tax, and entity choice, depreciation, and state treatment all change what you keep.
Limits and Disclaimer
This tool produces illustrative figures for discussion. It is not an appraisal, a financing commitment, or investment, tax, or legal advice. Loan terms shown are calculated from the inputs you provide and are not an offer of credit. Nothing here guarantees a return, a financing approval, or a sale price. Confirm tax treatment with your CPA and financing terms with a lender.
What to Do Next
Run the base case, then run it again with a 20% revenue decline and $10,000 of add-backs removed. If the store still services its debt in that scenario, you have a margin of safety. If it does not, the base-case return is not the number that decides this purchase.
The Next Step
Frequently Asked Questions
Why does this calculator show three different cash-on-cash numbers?
Because all three are defensible and they answer different questions. After debt service is the operating return. After the replacement reserve is what you can actually distribute. Counting your own labor as income is the number an owner-operator experiences. Quoting one without saying which is how listings inflate returns.
Should I value my own labor as a cost?
If you want a figure comparable to any other investment, yes. Working 25 hours a week has a market value, and a return computed without it is really a return plus a job. Both are legitimate things to want; conflating them makes the investment look better than it is.
What DSCR do lenders want?
Many apply a threshold around 1.25, computed after a market-rate salary for whoever runs the store and after striking add-backs without source documents. The calculator flags results below that. Test your coverage with $10,000 of add-backs removed before you make an offer.
How does the downside test work?
It applies a revenue decline at the contribution margin you set, because rent and much of the utility base are fixed and do not fall with volume. That makes laundromat margin highly sensitive in both directions, which is exactly why the downside case deserves as much attention as the base case.
Is my data stored?
No. Everything runs in your browser, nothing is transmitted or logged, and there is no form submission. Close the tab and the numbers are gone.
Sources
- Coin Laundry Association, 2024 Laundry Industry Survey — https://member.laundryassociation.org/hubfs/IndustrySurvey24.pdf
- BizBuySell, Laundromat and Coin Laundry Valuation Benchmarks, 2021-2025 closed sales — https://www.bizbuysell.com/learning-center/valuation-benchmarks/laundromats-coin-laundry/
- U.S. Small Business Administration, 7(a) Loans — https://www.sba.gov/loans/7a-loans/
- U.S. Small Business Administration, SOP 50 10 8 Technical Updates effective 2025-06-01 — https://legacy.sba.gov/sites/default/files/2025-05/SOP%2050%2010%208%20Technical%20Updates%20effective%206.1.2025.docx
This page is general information about laundromat transactions, not legal, tax, or investment advice, and not a guarantee of sale price, timing, or financing approval. Verify current rules with your own CPA, attorney, lender, and the relevant state or municipal agency before acting.