Child Care Loans: How to know which financing solution is right for you?

Child playing with buliding blocks

The types and options for child care loans are dependent upon the specific loan request being made. Financing has traditionally been fairly broad and can include conventional and SBA loans, assets-based loans and other non-traditional funding options.

There are various loan purposes to consider as a borrower depending on whether the daycare center owner is looking to:

  • purchase an existing business
  • obtain start-up financing for a new center
  • seek leasehold improvements
  • remodel or acquire real estate

When it comes to financing daycare centers or franchises, operators will face several decisions in choosing which loan product and lender is right for them. That’s where small business owners turn to us to help make the process easier and efficient.

How we can help you make the right financing choice.

Whether you’re opening a home-based child care service, taking over an existing business or are interested in a well-known franchise, you need to make the right choice when it comes to financing. Because child care is subject to governmental regulatory oversight, it’s critical to also understand that compliance with all state requirements is a key part of being a borrower in good standing.

At BoeFly, we can help match you with child care financing that’s right for your situation. Here’s a handy guide to the kinds of loans you can apply for:

SBA loan

  • Lower interest rates (typically 4.25%-8.75%)
  • Longer loan terms
  • Lower monthly payments  

Asset-based lines of credit

  • Revolving
  • Term loans secured by assets 

Unsecured business line of credit

  • No collateral needed
  • Stringent qualifications needed
  • Requires robust existing cash flow 

Merchant cash advance

  • Short-term financing  
  • Fast access to money
  • Higher interest rates

Seller carry financing

  • Partial or full financing by seller
  • Buyer and seller negotiate terms
  • Typically paid back within 5 years

The child care industry continues to grow.

$55B 2019 industry revenue1

2.4 % average industry growth 2015-20202

23.4% children under 5 years old in some form of child care environment3

7.8% of income families spent on child care in 20194

A pre-application checklist to apply for a daycare center loan.

  • Loan application & a list of supporting documents
  • Tax records for the business
  • History of sales
  • Business plan
  • Resumes for all owners
  • Projection of expected earnings

Helping Kiddie Academy® get up and running faster.

When the Vazirani family in West Cary, North Carolina, wanted to apply for a start-up business loan to open a daycare center.

“With our finance backgrounds, we knew that the process of going from bank to bank was tedious and antiquated,” said Deepak Vazirani. “Fortunately, Kiddie Academy® recommended we try BoeFly, saving us time and allowing us to focus on the other aspects of starting a business.”

Connecting small business owners with the right lender, anywhere.

The Vaziranis received multiple offers from lenders all over the country but ultimately decided to work with Dana Campbell, Vice President, Business Development Officer at First Chatham, a regional bank in Georgia. Even though First Chatham was more than 400 miles away, BoeFly’s lending platform made it simple to connect the Vaziranis with the best rates and the best bank for them.

Partner with the experts in child care business financing

We make it easy and efficient to apply for a child care loan with one of our array of proven lenders. Individual banks can appear like a worthy path, but we’re experts at helping connect child care owners with the financing options right for their situation.

1IBISWorld 2019
2IBISWorld’s 2019
3Center for American Progress, Americanprogress.org/issues/economy/news/2012/08/16/11978/fact-sheet-child-care/#:~:text=Almost%20one-quarter%20(23.4%20percent,centers%2C%20nurseries%2C%20and%20preschools.
4Center for American Progress, Americanprogress.org/issues/economy/news/2012/08/16/11978/fact-sheet-child-care/#:~:text=Almost%20one-quarter%20(23.4%20percent,centers%2C%20nurseries%2C%20and%20preschools.

Ready to hit your business and professional goals?