Find the best business loan rates (2024)

Complete Guide to Daycare Loans and Financing

  • Apply in under 2 minutes
  • Get funds as fast as 24 hours
  • Applying won’t impact your credit score
Decision in minutes

See if you qualify.

Loan Overview

Loan Amount Up to $500,000
Estimated Repayment Terms 1-5 Years
Interest Rate Starting at 7%
Speed of Funding As fast as 1 day

Child daycare services employ more than 40,000 workers, according to 2019 data from the U.S. Bureau of Labor Statistics (BLS). That figure doesn’t account for daycare service providers who are self-employed. After all, daycares can range from nationwide franchises like the Goddard School to small businesses like a local in-home nursery. 

Whether you run your daycare as a sole proprietorship or an incorporated company, expenses arise, and sometimes there’s just not enough capital on hand. That’s where daycare loans come in. 

Here are a few reasons you might turn to a small business loan for your daycare and financing options to consider.

Funding Your Daycare Center for Continued Growth

Most businesses go through a rough patch now and then, and daycares are no exception. While childcare is always going to be a needed service, the children you care for eventually get older and move on to school and out of your care, which can leave you at a loss for revenue. 

When you have slower periods, you might turn to a daycare loan to help cover the following expenses for your childcare center, among others.


According to small business insurance provider Next Insurance, a daycare center space that includes bathrooms, a kitchen and childcare areas can cost between $0.60-$2.50 per square foot. For a 1,000-square-foot space, that could be as high as $2,500 each month, $30,000 for a year. That can add up quickly when funds are low.


The median pay for childcare workers was $11.65 in 2019, according to the BLS. Let’s say you have to cover payroll for 3 full-time employees. Not including your own pay, that would be nearly $1,400 a week.  A full month of payroll could set you back $5,600. A boost of capital could be just what you need to stay current with payroll.


Just as most companies need to advertise their goods and services, so do daycare owners and those in the private education business. This is particularly true if you’re newer on the scene or trying to increase enrollment. You might consider using one or more marketing formats, such as fliers, circulars, local parenting magazine ads or online ads.

Equipment and Supplies

Is your daycare in need of new play equipment, bedding, furniture or electronics? If you said yes to any one of those (or all of them) but don’t know how you can afford to update your nursery or preschool, an education business loan could help. 

Use financing to purchase these items to enrich your childcare programs:

  • High chairs
  • Cribs
  • Changing tables
  • Toddler tables and chairs
  • Cubbies
  • Activity tables
  • Play kitchens 
  • Playhouses
  • Bookcases
  • Room dividers
  • Computers
  • Transportation (e.g., van, bus)

Insurance or Taxes

In the event of a lawsuit, you’ll want to be protected by an insurance policy, but the cost for a liability and property protection could be more than you anticipated when your installment comes due. Similarly, if you owe more in business income taxes than you had expected, that cost could prove burdensome in down times. 

While you may be able to work out a repayment arrangement with your carrier or the government, respectively, there are also lump-sum and flexible capital funding options that can provide capital when you need it.

Best Daycare Loans and Financing Options

When you’re trying to make your mark on what’s roughly a $59 billion industry, you may find that sometimes you just don’t have the savings or credit available to grow, or in some cases, get by during a slump. If that’s the case, here are some daycare funding options to consider.

Business Line of Credit

Business lines of credit are the ultimate in flexible financing. If you’ve ever had a credit card, you have an idea of how they work.  Get approved for a certain amount. Access your credit line only when you need it and use it for just about anything.

Don’t worry about using all of your credit at once, though you can if you need to. As you pay back what you use, your credit limit is restored incrementally up to the original approval amount.

Short-Term Loan

Short-term loans typically span 3-18 months and often require daily or weekly payments. This could be a financing option if you have an emergency expense or need help covering operating costs one month. This type of daycare funding is not meant for long-term investments.

Business Term Loan

If you want one lump-sum of funds but are looking for longer repayment terms than you’d find with a short-term loan, consider a longer-term loan. You might use a term loan to finance an equipment purchase, refinance debt or renovate your daycare. Regular installment payments are required and can be daily, weekly or monthly, depending on the specific terms of your financing agreement.

SBA Loan

Financing backed by the U.S. Small Business Administration is known as an SBA loan. SBA loans for daycare providers vary but are typically more accessible than conventional bank loans. This is because the SBA guarantees a percentage of each loan approved by a participating lender. Apply for an SBA loan if you need working capital, are looking to expand your business and more.

Equipment Financing

Whether you need to buy new stereo and television sets or are looking for a van to transport children, equipment financing could be an option. In some cases, you could be able to secure financing for the entire cost of the vehicle or machinery you’re looking to purchase.

Merchant Cash Advances 

If you need cash fast and don’t have the best credit, a merchant cash advance (MCA) may be the financing solution you need. MCAs are meant to be repaid quickly, so they typically have shorter terms than other financing options, and payments are often required daily or weekly. Additionally, the funding amount you qualify for is based on your business’s projected revenue.

Where to Find Small Business Loans for Daycares

When you’re on the hunt for a small business loan for daycare providers, you can see you’ve got options in terms of financing. Well, the same holds true for lenders.

Conventional Lenders

When you think of money-related matters, your initial inkling might be to contact your local credit union or a big-name bank. After all, conventional lenders like these have been the go-to for many for so long. 

While they can offer competitive interest rates and terms, the process to apply and get funded can be time-consuming and require a lot of paperwork. For many applicants, the requirements to qualify can be difficult to meet, whether due to lack of collateral or low credit score.

Alternative Lenders

These days, nonbank lenders offer an alternative to conventional banks. They provide fast funding and shorter repayment windows. They also tout streamlined applications of unsecured loans, including for borrowers with less-than-perfect credit. 

How to Get Funding for a Daycare Center

With Fast Capital 360, you can apply for daycare loans and financing by meeting the following qualifications:  

Minimum Requirements:   

  • 500+ FICO score
  • 6 months in business
  • Annual revenue of $120,000 

What You’ll Need to Get Started:

  • Basic information about your business and yourself 
  • 6 most recent monthly bank statements

Do you meet these qualifications?

See Your Loan Options

Apply with Fast Capital 360

Whether you want an SBA loan for your daycare facility or other funding for daycare centers you run, Fast Capital 360 is ready to help.

Quick and Easy Application

Complete a simple online application. A few minutes is all it takes to get started. 

Multiple Loan Offers

We partner with lenders throughout the country to bring more offers your way. You could even have an offer within hours of completing your application.

Expert Advice 

A Fast Capital 360 Business Advisor will review your offers with you so you can choose the one that works best for your business. 

Apply now

One application. Multiple loan offers.

Quickly compare loan offers from multiple lenders without impacting your credit score.

Back to Top