👉 Challenge: Child care centers face tight margins due to staffing, regulations, and real estate costs—business loans can ease the burden.
💼 Loan Types: Options include working capital, SBA loans, equipment financing, and lines of credit tailored to child care needs.
⚡ Fast Funding: Alternative lenders offer flexible repayment and quick approvals to help manage cash flow or support growth.
📉 Bad Credit Options: Loans like merchant cash advances and revenue-based financing are available even with poor credit.
📈 Use of Funds: Financing can support hiring, facility upgrades, safety improvements, licensing, and real estate expansion.
💳 Credit Building: Timely repayment helps improve business credit for better future financing terms.
📋 Simple Application: Apply online with basic documents and receive funding in as little as 24 hours.
🚫 Potential Drawbacks: Higher rates, collateral requirements, and repayment risk for businesses with weak financials.
Running a child care or day care center is more than just a business—it’s a commitment to supporting working families and enriching the lives of children. However, despite rising demand, daycare centers often face thin profit margins due to high staffing requirements, regulatory compliance costs, real estate expenses, and facility maintenance. From purchasing new equipment to covering payroll during slow months, managing cash flow in the child care industry can be challenging.
That’s where United Capital Source can help. We help facilitate small business loans for childcare centers and daycare facilities, offering flexible financing options tailored to the unique needs of these essential small businesses. Whether you’re opening a new daycare, renovating your facility, or hiring additional staff, our experienced team is here to support your growth.
Daycare centers earn revenue via monthly fees. But sometimes, you can’t wait until the end of the month to solve a problem or pay an incurring expense. We typically recommend a Business Line of Credit for businesses looking to minimize the impact of their business cycles (the time between performing a service and getting paid). With this type of working capital loan, the business has a revolving credit line for business expenses and only makes payments when they have a balance.
So, while still being paid monthly, the business can pay recurring and unforeseen expenses incurred in the running and growth of the business.
Need new equipment or renovations? A business line of credit lets you pay for them now since waiting comes with the risk of presenting an outdated, unsafe appearance to parents.
For other significant expenses, like increasing staff or marketing campaigns, we offer several business loans that do not feature fixed, monthly payments immediately after funding is distributed. New staff members and marketing campaigns are alike in that they take months to finance themselves. Many UCS clients take out different working capital loans to finance long-term investments since they wouldn’t have to make their largest payments until the staff or campaign is actually bringing in more sales.
We are also aware that daycare centers are often run by women, who statistically tend to start their businesses with less working capital than men. At United Capital Source, we do not believe that challenges exclusive to women should stop them from receiving the funding and terms they have rightfully earned. This is why we facilitate special small business loans for women. As long as you can prove steady revenue, we will likely work around obstacles like poor credit or limited funds to ensure you receive the same rewards as your male counterparts. Apply now to see how much you qualify for!
Child Care & Day Care Center Business Loans are financing solutions designed specifically for small business owners in the child care industry. These loans can help daycare owners manage operational costs, upgrade facilities, hire staff, or fund expansion plans. Many daycare centers experience seasonal cash flow fluctuations or unexpected expenses, and access to capital ensures that they can continue to provide high-quality service to parents and children.
Daycare business loans can help cover expenses like employee training and facility operation costs. They provide working capital to help businesses meet daily needs or pursue long-term projects, such as opening a second location or accommodating children with special needs. Whether you run a small preschool or a large childcare center, business loans can provide the financial support needed for sustainable growth.
Child care and daycare business loans come in the form of:
These loans work by providing an upfront loan amount or access to a revolving line of credit, which daycare owners can use for approved business expenses. Lenders review key financial indicators such as cash flow, revenue, credit history, and business health to determine loan eligibility and repayment terms. Depending on the type of loan, you may receive funds in a lump sum or have access to a credit line that you can draw from as needed.
Child care centers often qualify for funding based on their recurring monthly revenue from parent fees, which offers a predictable cash flow. This steady income stream can support financing for renovations, marketing, real estate acquisition, or staffing costs. Loan structures vary, and repayment terms may range from daily payments to longer-term monthly installments, depending on your business needs.
Some financing options offer flexible terms, allowing you to make smaller payments during slower months and larger payments during peak seasons. This flexibility is ideal for small businesses navigating the dynamic nature of the child care industry.
| LOAN TYPES | MAX AMOUNTS | RATES | SPEED |
|---|---|---|---|
| Merchant Cash Advances | $7.5k – $1m | Starting at 1-6% p/mo | 1-2 business days |
| SBA Loan | $50k-$10m | Starting at Prime + 2.75% | 8-12 weeks |
| Business Term Loan | $10k to $5m | Starting at 1-4% p/mo | 1-3 business days |
| Business Line of Credit | $1k to $250k | Starting at 1% p/mo | 1-3 business days |
| Receivables/Invoice Financing | $10k-$10m | Starting at 1% p/mo | 1-2 weeks |
| Equipment Financing | Up to $5m per piece | Starting at 3.5% (SBA) | 3-10+ business days |
| Revenue Based Business Loans | $10K – $5m | Starting at 1-6% p/mo | 1-2 business days |
Business loans for daycare and child care centers offer a wide range of benefits. They provide access to fast capital when you need it, enabling you to seize new opportunities or address urgent issues without disrupting your operations. Whether you’re purchasing supplies, upgrading your facility, or improving safety standards, financing helps ensure your daycare remains competitive and attractive to parents.
These loans also help childcare businesses manage seasonal slowdowns and maintain payroll without compromising service quality. Flexible repayment terms and fast approvals from alternative lenders mean you can respond quickly to business needs. With the right financing in place, child care providers can focus on what matters most—delivering high-quality care and educational experiences for children.
While daycare business loans offer numerous advantages, they also have some potential drawbacks. Interest rates may be higher for small businesses with limited credit history or low credit scores. In some cases, lenders may require collateral, which can be a barrier for newer or smaller child care centers without substantial assets.
Additionally, taking on debt requires careful planning to ensure repayment terms align with your business’s financial projections. Missed payments can damage your credit and reduce your chances of securing future funding. Traditional lenders, such as banks and credit unions, often have strict lending criteria and lengthy application processes, which can delay access to the funds needed.
Pros:
Cons:
The amount of paperwork required depends on the product you choose. Funds can be approved and distributed for most products within 1-3 business days. Here’s how to apply:
The first step is choosing the most sensible solution to the problem at hand. This should require some research, as each product is designed for different types of expenses and cash flow cycles. Are you looking to cover a short-term or long-term expense? Is demand expected to increase or decrease in the coming months?
Considering the funds’ purpose will also help us determine the correct borrowing and terms for your needs.
Here are the documents and information required for Child Care & Day Care Center Business Loans:
SBA loans require additional documents and information, such as financial statements. To learn what’s needed for the SBA-backed loans, visit our SBA loan page.
You can begin the application process by calling us or filling out our one-page online application. Either way, you’ll be asked to enter the information from the previous section along with your desired funding amount.
Once you apply, a representative will contact you to explain the repayment structure, rates, and terms of your available options. This way, you won’t have to worry about any surprises or hidden fees during repayment.
If you’re approved, we’ll contact you within 24 hours. After closing, funds for most business financing products should appear in your bank account within 24 – 48hours.
Your business loan isn’t just a way to get financing for your business. It’s also an excellent opportunity to start building (or improving) your credit.
Regardless of the type of business loan you get, make all your required payments on time and in full. If you get a business credit line or another form of revolving credit, keep your balance below the credit limit.
Consistently making your business financing payments on time and in full will positively impact your credit. And that means preferred rates and terms when you next need business financing.
If your application is declined, it’s possible that you applied for the wrong product to meet your cash flow needs. We would likely recommend a different product with a less hazardous repayment structure in this case.
Your application might also be declined if it is determined that you cannot afford to take on more debt at this time.
If your credit score is holding you back from accessing financing, consider working with a reputable credit repair service to raise your scores.
Child care and day care centers can use business loan funds for a wide range of purposes, including:
While banks and credit unions offer traditional lending options, their approval processes can be lengthy and restrictive. The application process for traditional lenders can take months with no guarantee of approval. This delay can be particularly challenging for small businesses that require rapid funding to sustain their operations.
Alternative lenders can provide daycare funding faster, often with same-day approvals. Daycare funding from alternative lenders may focus on the overall health of the daycare center, not just credit scores. United Capital Source helps child care providers access financing by evaluating the broader picture, including revenue trends and business potential.
Our team supports child care businesses in securing funds with flexible repayment terms and a streamlined application process, so you can continue serving your community and growing your daycare center.
Yes, childcare and daycare centers can apply for various SBA loan programs. SBA 7(a) loans provide up to $5 million of capital for small businesses, including daycare centers. Daycare center owners can use SBA 7(a) loans to cover expenses related to construction or the acquisition of new premises.
SBA 504 loans can be used to fund the purchase or construction of buildings for daycare centers and preschools. The SBA 504 loan has a fixed interest rate and a maximum loan amount of $5.5 million. Preschools and daycare centers can apply for SBA 504 loans to fund various projects that improve their services and ensure long-term success. SBA Express Loans can provide working capital through a faster application process
Yes, small business owners in the childcare industry can obtain business loans even with poor credit. At United Capital Source, we offer multiple options for daycare owners who may not qualify for traditional financing due to credit challenges. These include:
While bad credit business loans often come with shorter terms and higher interest rates, many are easier to repay and offer immediate access to funding. If your daycare center has strong revenue or collateral, you may qualify for higher loan amounts and more favorable repayment terms. For example, with a Merchant Cash Advance, you could access up to 150% of your monthly debit and credit card sales volume.
Need help choosing the right business loan for your child care center? Contact United Capital Source today to explore your daycare financing options and take the next step toward building a thriving child care business.
Fraud Disclosure:
Please be aware that individuals have been fraudulently misrepresenting to business owners (and others) that United Capital Source, Inc. (“UCS”) can assist small businesses in receiving government grants and other forgivable business loans, when in fact those grants or loans do not exist or are not available. These individuals have ulterior motives and are engaging in the unauthorized use of the names, trademarks, domain names, and logos of UCS in an attempt to commit fraud upon unsuspecting small business owners.
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