Child Care Center Feasibility Study in Georgia

Georgia child care: big loans, no recorded losses

Two numbers set Georgia's child care loans apart, both from the rest of the state's SBA book and from child care nationally. The first is size. The median loan is $882,500, which is 1.95x the class median across the country. A quarter of Georgia loans exceed $1.8 million while a quarter fall below $363,400. The second is loss. Across 186 loans paid out over FY2017 to FY2021, the recorded charge-off floor is 0.00%, both to date and at the five-year mark. Child care also weighs more in Georgia than it does nationally: the location quotient is 1.65x, child care places 5 of 39 in Georgia's own class ranking, and Georgia is 5 of 53 among states. From FY2017 to FY2026, SBA approved 486 loans here for $599.1 million.

A median near $882,500 is not a small lease-up. SBA 7(a) carried 394 loans and SBA 504 carried 92. Capital Partners Certified Development Company is the top 504 lender, with 32 loans and $43.9 million, followed by Florida Business Development Corporation with 20 loans and $27.7 million and Georgia Certified Development Corporation with 15 loans and $17.6 million. Harvest Small Business Finance, LLC leads 7(a) with 45 loans and $38.1 million, and Live Oak Banking Company's 18 loans carry $47.9 million, larger dollars on fewer loans. Readycap Lending, LLC, The Huntington National Bank and Bank of America, National Association each hold between 15 and 21 loans. Franchise brands account for 26.1% of loans.

Reading a 0.00% floor correctly

A charge-off floor of 0.00% is a record, not a promise. It reflects charge-offs booked to date on the FY2017 to FY2021 disbursements, and later, larger cohorts, such as the 69 loans worth $84.0 million approved in FY2025, have not been tested by time. Cancellation after approval runs at 10.0% of FY2017 to FY2024 approvals, or 11.1% on the wider count that treats undisbursed loans as cancelled. A borrower should treat it as a record of past cohorts, not a forecast for a new center.

What a Georgia center study must establish

Demand in child care is licensed capacity set against the young children within commuting distance of the site and the centers already enrolling them. Fulton County with 73 loans, Cobb and Gwinnett with 71 each, and DeKalb with 51 have drawn most of the lending. Cost has to carry site work, playgrounds, kitchens and the licensing build-out. Debt service coverage needs a realistic ramp from opening enrollment to capacity, with staff ratios in the payroll from the first day. For a purpose-built center, the appraisal needs sales of other child care properties. One data limit: family child care homes share a code with centers and cannot be separated, so home-based providers are inside these counts.