How to Start a Laundry Business and Secure Financing for It

Laundry services are always in demand, especially among students, working professionals, and busy households. If you're looking for a low-barrier business idea with steady demand, a laundry business could be a practical option. With a proper laundry business plan, right location, and access to funds, you can start a profitable laundry setup. This guide helps you understand the process from setup to financing.

Starting a laundry service is simpler compared to other service-based businesses. Here’s how you can go about it:

1. Choose the Type of Laundry Business

You can start a self-service laundromat, doorstep pickup and delivery service, or a basic wash-and-fold setup. Choose based on the target area and budget.

2. Pick a Good Location

Look for a place near hostels, paying guest accommodations, residential areas, or offices. Easy access and visibility play a big role in attracting customers.

3. Set Up the Workspace

Ensure your outlet has proper water supply, drainage, electrical wiring, and space for machines. Designate zones for washing, drying, ironing, folding, and storage.

4. Purchase Equipment

Buy commercial washing machines, dryers, ironing boards, steam irons, water tanks, and laundry trolleys. Start small and upgrade as demand grows.

5. Hire Staff

Hire skilled workers for washing, ironing, and packaging. For pickup and delivery services, you may need a dedicated rider.

6. Price Your Services

Set competitive pricing based on the local market. Offer service packages, monthly deals, or discounts for bulk or regular customers.

7. Promote Your Business

Use flyers, online ads, local partnerships, and Google listings to spread the word. Customer referrals can also work well in this space.

8. Set Up Delivery Channels (if applicable)

If you’re offering home pickup and delivery, plan routes, fix timings, and ensure prompt service. This can become a key USP for your business.

Before opening your laundry shop, you’ll need to take care of a few basic legal formalities. Here are the standard registrations and approvals:

Register Your Business

Start by registering as a sole proprietorship, partnership, or private limited company. The structure depends on your investment and future plans.

Shop and Establishment Registration

You must register under your state’s Shops and Establishments Act. It’s mandatory for all commercial outlets with employees.

Trade Licence from Local Municipality

This licence is issued by your local municipal body and permits you to run a laundry business at your chosen location.

GST Registration

If your annual turnover exceeds the threshold or if you’re offering services online, you’ll need to register for GST.

Pollution NOC (if required)

In some cities, commercial laundry businesses may need a No Objection Certificate from the local pollution control board due to water usage and detergent discharge.

Fire Safety Compliance

Although not always mandatory, it’s good to have basic fire safety measures in place — especially if you use heavy electrical equipment or gas-based irons.

Make sure you check with local authorities to stay up to date with regional rules, as requirements can vary slightly across states or cities.

Opening a laundry business involves various costs, which can vary depending on the location, size, and type of services offered. 

Here’s a breakdown of the expected investment, based on city tiers:

Disclaimer: The cost estimates mentioned above are based on general industry averages and may vary depending on the specific location, size, and nature of your laundry business. It’s advisable to conduct a detailed market survey and consult with local experts before finalising your budget.

Cost Breakdown by Category

• Land and Location

Rent costs will vary depending on the city tier and location (mall, high street, residential area). In Tier-1 cities, commercial spaces can cost ₹50,000 to ₹2 Lakhs per month.

• Equipment

Setting up a laundry involves purchasing washing machines, dryers, and pressing equipment. Equipment costs can range from ₹2 Lakhs to ₹10 Lakhs, depending on quality and capacity.

• Licenses and Permits

Obtaining licenses such as GST registration and FSSAI can cost between ₹20,000 to ₹50,000, depending on location and business scale.

• Inventory (Detergents, Packaging, etc.)

The initial inventory of detergents, fabric softeners, dry-cleaning chemicals, and packaging materials will range from ₹20,000 to ₹1 Lakh, depending on the scale of your business.

• Marketing and Branding

Expenses for signage, local advertising, and initial promotions can range from ₹10,000 to ₹50,000, depending on the marketing methods used.

Starting a laundry business requires proper financial planning. From buying machines and setting up your shop to managing daily expenses like water, electricity, and staff wages, costs can add up quickly. Having a clear laundromat business plan helps you stay in control and avoid budget issues.

If you decide your funding sources in advance, including loan options, you can get started without delays or stress.

Here’s what you can do:

Calculate Initial Investment

Estimate the total cost of setting up your laundry outlet. Include the price of washing machines, dryers, plumbing work, interiors, signage, and initial stock of detergents and packaging material.

Create a Budget

Prepare a monthly budget for operating costs like electricity, staff wages, transport, water usage, and supplies. This helps you monitor spending and maintain cash flow.

Explore Financing Options

If personal savings are not enough, consider applying for a business loan. Loans can help cover setup costs and initial working capital. Compare different lenders to find one with terms that suit your business needs.

Plan for Repayment

Check the EMI amount and repayment schedule before taking the loan. Ensure it fits into your monthly expenses and doesn’t strain your business operations.

A business loan can help you handle both setup and operational needs. Here are common ways you can use loan funds:

• Buy washing machines and dryers

• Set up shop interiors and work zones for washing, ironing, folding, and storing laundry

• Arrange plumbing and drainage system strong water lines, filters, and efficient wastewater disposal

• Purchase detergent and packaging supplies to stock up on cleaning products, bags, and tags

• Hire and cover salaries for washers, ironers, and pickup/delivery executives

• Invest in technology to use POS systems, order tracking tools, or even a basic website or mobile app

• Cover transport costs If you offer pickup and delivery, for which you may need a bike or van

If you're planning to start or expand your laundry business, comparing loan options in one place can save you both time and effort. On Bajaj Markets, you get access to business loan offers from a range of lenders, each with its own interest rates, eligibility requirements, and repayment terms.

Here are some of the business loans offered through Bajaj Markets:

Disclaimer: The mentioned rates are subject to change at the lender’s discretion.

Before applying for a loan to fund your laundry business, it’s important to check whether you meet the basic eligibility criteria. Lenders use these details to assess your repayment capacity and the financial health of your business.

Here are the key conditions you’ll typically need to fulfil:

• You must be an Indian citizen

• You should have a healthy CIBIL score

• You must be self-employed, either as a professional (e.g. doctor, chartered accountant) or a non-professional (e.g. trader, manufacturer)

• Your age should fall between 21 and 60 years

• Your business must be registered as a partnership firm, LLP, or private limited company

• Your business should have been active for at least one year

• The minimum annual turnover should be ₹1.5 Lakhs, as shown in your ITR

Along with meeting these criteria, you’ll need to keep some documents ready for the application process. 

Here's what most lenders ask for:

• Identity Proof- PAN card, Aadhaar card, passport, driving licence, or Voter ID.

• Address Proof- Aadhaar card, passport, utility bill, or lease agreement.

• Income Proof- Bank statements for the past 6 months, along with your latest ITR. You’ll also need certified documents such as your profit and loss account, income statement, and balance sheet for the last two financial years.

• Business Proof- Depending on how your business is registered, this could include:

  • Sole Proprietorship Declaration

  • Verified Partnership Deed, or

  • Certified copy of the Memorandum and Articles of Association (MOA & AOA)

Keeping these documents in order can help you avoid delays in your loan approval process.

When seeking a loan to start or expand your laundry business, your creditworthiness will be evaluated differently depending on whether you are an individual or a registered company. Individuals will need to provide their CIBIL score, while businesses must submit a Company Credit Report (CCR).

For Individuals (Sole Proprietors/Freelancers)

As a sole proprietor, you will need to provide your CIBIL score, which is used to assess your personal creditworthiness. A CIBIL score typically ranges from 300 to 900, and a score of 750 or above is usually required to secure favourable loan terms. 

A higher score not only improves your chances of getting the loan but also allows you to negotiate for better interest rates and repayment options.

For Companies (Registered Business Entities)

If you’re applying as a registered business entity (such as a Pvt Ltd, LLP, or partnership), you will need to submit your company’s CCR. The CCR rating reflects the financial health of your business, including how effectively you manage debt and payments. 

The CCR rating ranges from 1 to 10, where a rating of 1-3 is considered excellent, showing strong financial stability and lower risk to lenders. A strong CCR rating increases your chances of securing a larger loan with favourable terms for your laundry business.

Applying for a business loan on Bajaj Markets is quick and completely digital. Here’s how you can do it:

1. Click on the ‘Check Offers’ button available on the page

2. Fill in your basic personal details in the online form

3. Enter the loan amount and select your preferred repayment tenure

4. Submit the form for verification

Once verified, you can view personalised loan offers from multiple lenders and proceed with the one that best matches your needs.

The Indian government offers several schemes designed to support Small and Medium Enterprises (SMEs) and Micro, Small, and Medium Enterprises (MSMEs), including those looking to start or expand a laundry business. These schemes provide affordable financing options for business owners, helping them cover costs like equipment, location setup, and working capital.

Here’s a table outlining the key government schemes you can explore for your laundry business:

Disclaimer: The loan amounts and scheme details provided above are indicative and may vary based on eligibility criteria, location, and specific government policies. Please consult relevant authorities for the most up-to-date information.

A laundry business may seem like a basic service, but with the right planning, it can become a steady and reliable source of income. From choosing your business model to securing the required funds and licences, every step matters.

Whether you start small or aim to scale in the future, careful financial planning and smart use of business loans or government schemes can help you succeed. With consistent service and a focus on quality, your laundry business can grow steadily in a competitive market.