Industry data
Financing for daycare centers: what the loan data shows
3,037 SBA 7(a) loans went to daycare centers recently, at a median of $398,000. The lenders that make them, the terms they write, and what underwriters look at.
3,037 SBA 7(a) loans went to daycare centers in the most recent fiscal years, at a median of $398,000 over 10 years. 43.1% went to new or under-two-year-old businesses, and the most active lender was The Huntington National Bank.
What a daycare center loan actually looks like
These are approvals, not advertised ranges. Computed from SBA 7(a) loan-level FOIA data released 2026-06-30.
| Measure | Child care and daycare centers | All 7(a) borrowers |
|---|---|---|
| Loans approved, fiscal years 2023 to 2026, using data released June 2026 | 3,037 | 214,102 |
| Median loan | $398,000 | $150,000 |
| 25th - 75th percentile | $102,750 - $935,850 | $50,000 - $500,000 |
| Median term | 10 years | 10 years |
| Median initial rate | 9.75% | 10.25% |
| Share to new businesses | 43.1% | 33.6% |
| Charge-off rate, FY2010-19 | 3.7% | 7.1% |
What stands out
Reading these figures against all 7(a) borrowers:
- Loans here run larger than average. The median of $398,000 is 165% above the $150,000 national median. Expect lenders in this market to be geared toward bigger deals, and expect a small request to get less attention.
- New businesses do well here. 43% of these loans went to startups or businesses under two years old, against 34% nationally — an unusually open market if you have no trading history.
- Lending here is fragmented. The top three lenders made only 18% of these loans between them, so no single institution owns this market. That is good news: it means shopping genuinely pays.
- Rates run lower here. The median initial rate of 9.75% is 0.50 points below the 10.25% national median, which usually tracks loan size and perceived sector risk rather than geography.
- This market has performed well. Its FY2010-2019 charge-off rate of 3.7% is below the 7.1% overall figure, which is part of why lenders compete for it.
What lenders look at in this sector
Licensed capacity, actual enrollment against that capacity, and staff ratios are the underwriting. State licensing transfers are rarely automatic on an acquisition, and the timeline for that transfer frequently sets the closing date.
Which lenders actually fund daycare centers
Ranked by loans approved in this niche. The median, startup share and rate describe each lender's own loans to daycare centers, not its national averages — which is how you spot a genuine specialist.
| Lender | Loans | Median loan | Startup share | Median rate |
|---|---|---|---|---|
| The Huntington National Bank | 238 | $132,000 | 42% | 10.12% |
| Live Oak Banking Company | 160 | $1,772,500 | 52% | 8.25% |
| TD Bank | 135 | $85,000 | 36% | 10.50% |
| Readycap Lending, LLC | 125 | $350,000 | 25% | 11.25% |
| Newtek Bank | 93 | $155,000 | 19% | 11.50% |
| Wells Fargo Bank | 82 | $570,300 | 70% | 7.33% |
| U.S. Bank | 79 | $75,000 | 35% | 9.49% |
| Manufacturers and Traders Trust Company | 79 | $50,000 | 52% | 11.25% |
| Bank of America | 77 | $595,800 | 47% | 6.92% |
| Northeast Bank | 67 | $84,100 | 9% | 10.75% |
Where these businesses borrow
Most active states for daycare centers: Texas (358), California (249), Florida (239), New York (169), Pennsylvania (156), Ohio (154).
Which financing fits
| Product | Fit for this sector | Typical cost |
|---|---|---|
| SBA 7(a) | The dominant vehicle in this niche | 10.0% - 14.0% APR |
| Equipment financing | For the hard assets, often cheaper separately | 7.0% - 30.0% APR |
| Business acquisition loan | If you are buying an existing operation | 10.0% - 14.0% APR |
Before you apply
- Check coverage first. Run the payment through the affordability calculator at 1.25x.
- Shortlist from the lender table, favouring ones whose median loan here is close to what you need.
- Assemble the documents — see the checklist.
- If you are buying rather than starting, read business acquisition loans first; the injection rules and diligence are different.