SBA 504 loans for Child Care and Day Care
Over the last decade, child care and daycare operators have used SBA 504 financing to fund more than $4.4 billion in real estate, construction, and equipment. We help you secure the same financing — with 25-year fixed rates and a team that knows the 504 program inside out.
The Child Care and Day Care SBA 504 market, by the numbers
What ten years of Child Care and Day Care SBA 504 loans — pulled directly from the SBA's own data — tell us about how operators finance this business.
Source: SBA 504 loan approvals for NAICS 624410 , FY2016–FY2025. Data via FOIA request, updated quarterly.
What an SBA 504 loan covers for a Child Care and Day Care
SBA 504 financing is built for long-term assets — the real estate, infrastructure, and major equipment that anchor a Child Care and Day Care business.
Property purchase & land
Own the building your center operates in instead of renting it. Whether you're buying an existing center or a lot to build on, 504 lets you take down the real estate with as little as 10% down and stop paying a landlord's mortgage.
- Existing child care centers
- Standalone buildings and lots
- Converting retail or office space to a center
- Land for a ground-up build
- Buying out your current lease
Ground-up construction
Build a center designed around how kids actually learn and play. 504 covers the shell and the build-out — the classrooms, the kid-scaled restrooms, the secured entry, and the playground that licensing and parents both expect.
- Ground-up center construction
- Classrooms and activity rooms
- Kid-scaled restrooms and sinks
- Secured entries and fencing
- Playgrounds and outdoor play areas
Expansion & second locations
Waitlists are the signal to grow. Use 504 to add classrooms and licensed capacity, open a second location, or take over another operator's center — without draining the cash flow that keeps your current rooms staffed.
- Second and third center locations
- Adding classrooms and licensed capacity
- Acquiring another operator's center
- Expanding into adjacent space
- Renovating a center you've acquired
Equipment with long lives
The durable equipment and systems that make a center run — and last long enough to finance. 504 is built for big-ticket items with a long useful life, so you spread the cost over the years they'll actually serve your families.
- Playground structures and safety surfacing
- Commercial kitchen equipment
- Classroom furniture and cubbies
- Security, camera, and access systems
- Bus or van for transport programs
How SBA 504 financing is structured
Three pieces of capital come together so you only put 10% down on a project that might cost millions.
First lien (50%)
APC funds this directly — we're a private direct lender, not a broker. Term and rate quoted upfront.
SBA 504 / CDC (40%)
Second lien, fixed for 25 years through a Certified Development Company. Rates locked at funding.
Borrower equity (10%)
Cash down, retained equity in existing real estate, or seller carry-back in some cases.
What a 504 project for a Child Care and Day Care looks like
Three illustrative examples showing typical deal structures, financing splits, and project scopes.
Two educators opening their first independent center built a ground-up early learning facility — classrooms, kid-scaled restrooms, a secured entry, and a playground designed to licensing standards. As a startup on a special-purpose build, it was structured at 20% down. One 504 loan wrapped the land, the building, and the build-out at a long fixed rate.
An operator who already ran one center acquired a second — an established, fully enrolled center with a waitlist, real estate included. Because it was a cash-flowing business on a special-purpose property, the deal came together at 15% down. The 25-year fixed 504 rate locked the payment so tuition revenue could go toward staff and programs.
A center turning families away built out additional classrooms and a second playground to raise its licensed capacity. Rather than draining operating cash, the owners used a 504 loan at 15% down. The long fixed term kept payments steady while the new rooms filled from the existing waitlist.
Owning your Child Care and Day Care property beats leasing — here's the math
Slide the inputs to match your situation. The equity number on the right is what you'd have in 10 years if you owned instead of leased.
Where Child Care and Day Care SBA 504 money is going
Geography, deal sizes, top CDCs, and the banks making it happen — all pulled from a decade of SBA data.
Top 10 states by loan volume
| State | Loans | Total funded | |
|---|---|---|---|
| 1 | Florida | 250 | $269M |
| 2 | California | 181 | $196M |
| 3 | Texas | 168 | $248M |
| 4 | Illinois | 109 | $84M |
| 5 | Georgia | 87 | $103M |
| 6 | Minnesota | 87 | $78M |
| 7 | Massachusetts | 84 | $68M |
| 8 | Ohio | 62 | $40M |
| 9 | Wisconsin | 53 | $52M |
| 10 | North Carolina | 49 | $62M |
Deal size distribution
Top CDCs financing Child Care and Day Care
These Certified Development Companies have funded the most Child Care and Day Care SBA 504 deals over the past decade. Click any CDC for their full profile.
Top 10 third-party lenders for Child Care and Day Care deals
| # | Lender | Loans | Volume |
|---|---|---|---|
| 1 | Bank Five Nine | 61 | $173M |
| 2 | JPMorgan Chase Bank | 60 | $52M |
| 3 | Regions Bank | 47 | $102M |
| 4 | Meadows Bank | 40 | $72M |
| 5 | Bank of America, | 37 | $59M |
| 6 | TD Bank | 37 | $85M |
| 7 | Wells Fargo Bank National Association | 29 | $53M |
| 8 | Live Oak Banking Company | 25 | $69M |
| 9 | SouthState Bank | 23 | $34M |
| 10 | Truist Bank | 21 | $38M |
What it takes to qualify
SBA 504 has clear, objective criteria. Most Child Care and Day Care operators we work with qualify.
Business requirements
- For-profit businessSBA 504 is for operating companies, not investors or holding companies.
- Owner-occupied useYou operate the Child Care and Day Care — you're not just buying real estate to lease out.
- US-based and below SBA size limitsMost Child Care and Day Care businesses qualify under SBA's small business size thresholds.
- Demonstrated ability to repayCash flow, credit, and business experience all matter — but no perfect score required.
Project requirements
- 51% owner-occupancyYour business must occupy at least 51% of the financed property.
- Eligible use of fundsReal estate, ground-up construction, major equipment, and certain refinances qualify.
- Long useful lifeEquipment financed under 504 must have a useful life over 10 years.
- 10% equity contributionCash, retained property equity, or seller carry — structured to fit your situation.
Most Child Care and Day Care operators qualify. The fastest way to know is a 10-minute call. 1-855-504-LOAN
Built for Child Care and Day Care financing
We're a direct lender that specializes in SBA 504 — not a broker, not a generalist.
Explore SBA 504 loans by industry
A decade of loan data, case studies, and deal structures for each of the property types we finance most.
Ready to finance your Child Care and Day Care project?
Schedule a 15-minute call. No application fee, no obligation.