Child Care Center Feasibility Study in the Dallas-Fort Worth-Arlington, TX Metro Area

Loans about twice the national size

Dallas-Fort Worth-Arlington stands apart from the national child care file on loan size. Its median of $924,650 is 2.05x the national median for the class, the middle half runs from $357,500 to $2.2 million, and 404 approvals dated FY2017 through FY2026 total $591.5 million. The class is fourth of 39 among local asset classes, and the area is fourth of 493 for child care centers. The location quotient is 1.62x, so centers account for a clearly higher share of local lending than of lending nationwide.

By program, SBA 7(a) carries 351 loans and SBA 504 carries 53. Franchise flags are on 44.6% of loans, which means brands are present beside independents. By county, Collin has 105 loans, Tarrant 103, Dallas 79 and Denton 75, while Kaufman has 11, Rockwall 10, Ellis 9 and Parker 6.

Lenders by program

The lender lists give the present holder of each loan according to SBA. On the 504 side the list opens with Capital Certified Development Corporation at 15 loans and $23.0 million, Greater East Texas Certified Development Company 12 worth $20.4 million, North Texas Certified Development Corporation 12 worth $19.9 million, and LiftFund, Inc. 8 worth $13.3 million. For 7(a), Live Oak Banking Company heads the list at 25 loans and $73.5 million, Wells Fargo Bank National Association 24 worth $32.8 million, The Huntington National Bank 21 worth $25.4 million, PNC Bank, National Association 17 worth $43.7 million and Readycap Lending, LLC 17 worth $28.7 million. These are holdings and say nothing about the standards of any holder.

Roughly one approval in nine, at least 11.7% for FY2017 to FY2024, fell through before funds moved; the stricter ceiling that also treats undisbursed Dallas-Fort Worth loans as cancelled is 13.3%. The charge-off rate to date has no printed value: Loan Analytics withholds it for this cell because the loan count behind it is small, and a blank here is not a claim of zero. Annual approvals went from 25 in FY2020 to 50 in FY2021 and stood at 47 in FY2026, worth $77.2 million. Because the family child care homes sharing the same industry code cannot be separated from centers, the figures can include in-home operators.

What a study for a center in the area has to test

A center study turns on licensed capacity and enrollment ramp. It must count the children in the trade area by age band, the competing centers and their ratings, and the ratio of staff that state rules require for each age group. Build-out for a purpose-built building is costly, so the valuation has to split the building from the operating business. Debt service coverage should assume months of partial enrollment. One caution on counting: placement in the area runs through the project county, set against the July 2023 area list, and a county that cannot be matched removes the loan, so Dallas-Fort Worth totals can only be understated.