Child Care Center Feasibility Study in the Houston-Pasadena-The Woodlands, TX Metro Area

Where Houston child care is truly unusual

Houston stands out in child care for how much of the local SBA book the class takes. The location quotient is 2.07x, which is more than double the national weight, and Houston is 3 of 493 areas for child care center loans, with child care itself placing 3 of 39 on the local list of classes. Tickets are heavy too: the median loan of $803,000 sits at 1.78x the class's national median, and the central half of tickets ranges from $334,700 to $2.1 million. Between FY2017 and FY2026 SBA approved 419 loans here, worth $609.4 million in gross dollars.

Real estate in the loan mix

A median near $803,000 and a ceiling of $2.1 million on the middle half point to projects that include a building, not just a lease. SBA 7(a) carries 357 loans and SBA 504 carries 62, a larger 504 presence than most service classes show. Franchised centers make up 39.1% of loans. Harris County holds 244 of them, Fort Bend 79, Montgomery 44, Brazoria 33 and Galveston 12. Volume fell to 25 loans in FY2020, and peaked at 63 in FY2025, though dollars were higher in FY2017 ($76.9 million on 49 loans) and FY2026 ($82.8 million on 47).

Lenders as SBA records them

In the 504 program, Capital Certified Development Corporation holds 20 loans worth $32.7 million and North Texas Certified Development Corporation 19 worth $29.8 million, trailed by LiftFund, Inc. and Community Certified Development Corporation at 7 each. Across 7(a) holdings, The Huntington National Bank has 33 loans, Plains State Bank 26 for a notable $76.1 million, Wells Fargo Bank National Association 26, Readycap Lending, LLC 20 and Prosperity Bank 15. Plains State Bank's average loan is easily the biggest among them. These are holdings as SBA lists them and not a view of any lender's policy.

Cancellations, losses and a shared industry code

The cancellation floor is 9.7% for loans approved in FY2017 through FY2024, and the charge-off floor is 4.0% among 173 loans in the FY2017 to FY2021 funded group. Also missing for Houston are a cancellation ceiling and a five-year charge-off measure, which the source holds back on thin counts. A coding point colors all of this: one industry code covers centers and in-home child care, which blurs a licensed center and a home-based provider within the totals.

Testing a Houston child care center

Any study of a Houston center should establish enrollment demand by neighborhood, since a center that needs a building and a license for many children is very sensitive to a thin catchment. It should test construction or conversion cost against an $803,000 median, show staffing ratios, tuition collected and debt service at a mature enrollment and at a slower fill, and give the appraiser an income the licensed capacity can really generate. Counties are assigned to areas as of July 2023, and loans in counties that cannot be assigned are not in this record.