How much does a Medical Linen Service cost to buy?

A typical Medical Linen Service sells for 2.2x to 6.5x seller's discretionary earnings. With estimated SDE of $224K, expect to pay roughly $493K to $1.5M before adjustments for assets, debt, growth, and local market quality.

How much does it cost to start a Medical Linen Service?

Startup costs range from $250K to $2.5M depending on location, equipment, and scale.

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Medical Linen Service

Q: What are the profit margins for a Medical Linen Service?

The average profit margin for a Medical Linen Service is around 14%. Costs include washer/extractor systems, dryers, tunnel washers, water, energy, chemicals, linen inventory, route trucks, drivers, plant labor, repairs, infection-control processes, insurance, and tracking software.

Clinics and surgery centers outsource the sheets nobody wants to touch

Bottom line

Worth studying, but do not buy without strong local proof.

Medical linen services rent, launder, sanitize, track, and deliver sheets, gowns, towels, scrubs, blankets, and reusable textiles for clinics, surgery centers, dentists, veterinarians, senior care facilities, and hospitals. The niche is capital-heavy, but contracts are sticky because healthcare customers need compliant clean linen every day.

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Acquisition score

Fair

Avg Revenue

$1.6M

Profit Margin

14%

Acquisition Multiple

2.2x - 6.5x

Startup Cost

$250K - $2.5M

How It Works

Operators own or lease linen inventory, pick up soiled bags on fixed routes, process textiles in compliant laundry facilities, track inventory loss, and deliver clean bundles back to customers. Revenue comes from per-pound processing, rental programs, route minimums, specialty packs, replacement fees, and multi-year contracts.

Revenue Range

Low End

$350K

Typical

$1.6M

High End

$12.0M

Pros

+Healthcare usage creates predictable recurring volume
+Contracts can run multiple years with inflation escalators
+Route density improves unit economics
+Inventory tracking and compliance make vendors sticky

Cons

-Laundry plants, utilities, labor, and linen inventory require heavy capex
-Margins are lower than asset-light services
-Quality misses can lose accounts quickly

Best For

Laundry, logistics, route-service, or healthcare-service operators with capital discipline and route-density focus

Operating Costs

Costs include washer/extractor systems, dryers, tunnel washers, water, energy, chemicals, linen inventory, route trucks, drivers, plant labor, repairs, infection-control processes, insurance, and tracking software.

SBA Financing Estimator

Adjust the deal — see if it cash flows after debt service

$-47336/mo

after debt service

Deal price — $6.4M

Range: $2.7M (2.2×) to $12.0M (6.5×+)

Down payment — 15% ($960K)

SBA minimum equity injection is 10% for change-of-ownership

Interest rate — 8.00%

Current prime-based SBA rates: 7.5–10.5%

Loan term — 10 years (120 mo)

Standard SBA 7(a): 10 years for business acquisition

Down payment

$960K

15% equity injection

Loan amount

$5.4M

85% SBA-financed

Monthly payment

$66K/mo

$2.5M total interest

Monthly profit

$19K/mo

at 14% margin

Monthly cash flow after debt service

$-47336/mo

Margin does not cover debt service at these terms. Lower the deal price, increase the down payment, or extend the loan term.

Estimates only. Excludes owner compensation, capex, working capital draws, and taxes. Margin assumes average occupancy and volume. Actual SBA terms vary by lender and borrower profile.