What equipment lease details should I gather before borrowing to buy a laundromat?

Start by making a list of all machines and sorting them into owned outright, financed and leased. Many laundromats mix the three, and the owner may not remember which is which. Ask for each agreement and read it closely: when it ends, what happens at the end, what the buyout looks like and what happens if you miss a payment.

Next, ask whether each lease can be transferred to a new owner and on what conditions. Some need the lessor’s approval, and some may change on a transfer. Your lawyer should read these before you commit to a price. If a lease does not transfer, you may have to replace equipment or arrange new financing, which changes your whole plan.

Then look at the numbers. Add up the monthly payments and compare them with the shop’s earnings. A lender will do the same, and those payments reduce what is left to repay a loan. Also ask about maintenance responsibility and who pays for repairs. If you also lease the premises, keep those papers separate from the equipment ones, since a lender will want both. A specialist can estimate the machines’ condition and remaining life. Photograph each machine’s plate and serial number so the schedule can be checked against what is actually on the floor.

Key takeaways

• Sort every machine into owned, financed or leased before you approach a lender.
• Ask whether each lease transfers to you and on what conditions.
• Add up the payments and compare them with earnings, since a lender will.