Any parent knows the cost of quality daycare has risen considerably. This is primarily an outcome of the increased need for daycare, now that it’s more common for new parents to have full-time jobs. But like any other business, the amount of money daycare centers take in is merely a reflection of the amount of money it costs to stay in business and maintain their customers’ trust.
Expenses for running a daycare keep profit margins surprisingly low. Traditional businesses can hire as many employees as they want, but daycare centers must comply with state laws that mandate certain staff-to-child ratios. Payroll can therefore eat up approximately 70% of revenue from sales, all year round. Daycare centers often struggle to find good help, so they must pay them well when they do.
Hard assets like playgrounds, toys, couches, storage areas, cribs can cost you about $600 per child. Everyday equipment must be regularly replaced, on top of continuous expenses like cleaning supplies, food, crafts, and office supplies. Then there’s your increasingly necessary marketing budget, which is likely to rise now that more and more daycare centers are opening throughout the country. Between these expenses and rent, property taxes, insurance, and maintenance, daycare operators can expect profit margins of roughly 5%.
United Capital Source is proud to be facilitating Small Business Loans for Child Care & Day Care Centers across America. Like other customer service businesses such as senior healthcare centers and restaurants, child care businesses require refurbishment to stay competitive. Contact us today for your FREE business funding consultation!
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 A business line of credit lets you pay for them now since waiting comes with the risk of presenting an outdated, unsafe appearance to parents.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!
|LOAN TYPES||MAX AMOUNTS||RATES||SPEED|
|Merchant Cash Advances||$5k – $1m||Starting at 1-6% p/mo||1-2 business days|
|SBA Loan||$50k-$5.5m||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 $1m||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||$5K – $1m||Starting at 1-6% p/mo||1-2 business days|