Child Care Center Feasibility Study in Illinois

Child care weighs heavily in Illinois SBA lending

Child care is a top-tier class in Illinois: it holds rank 3 of 39 among Illinois asset classes, and its location quotient of 1.35x means centers take a noticeably larger share of Illinois lending than they do nationally. The state ranks 6 of 53 for child care loans, with 481 approvals worth $349.0 million across FY2017 to FY2026. Loans here run a little smaller than elsewhere, a median of $370,000 at 0.82x the class median nationwide, with the middle half of approvals between $150,000 and $853,900. The case for the cell rests on its weight in the state rather than on any one measure.

Cook County, 504 lenders and recent growth

Cook County holds 256 of the loans, with DuPage at 37 and Will at 35 a long way behind. SBA 504 is a real force: 109 loans against 372 under SBA 7(a), led by SomerCor 504, Inc. with 54 loans and Small Business Growth Corporation with 48 worth $43.2 million. Of the 7(a) lenders, The Huntington National Bank holds 50, U.S. Bank, National Association 27 and Byline Bank 26, while Live Oak Banking Company holds only 15, which carry $27.8 million. Franchise systems account for 17.5% of loans. Approvals rose: FY2025 brought 74 loans and $51.7 million, the high point of the decade, before FY2026 eased to 49.

Cancellation, losses and the study

For centers approved in Illinois during FY2017 to FY2024 the cancellation floor reads 13.1%, but counting still-undisbursed loans lifts the ceiling to 17.6%, a gap made of approved Illinois centers whose funds were not yet out when the data closed. For a borrower that gap is worth planning around. Losses are low: 1.8% of the 167 center loans that funded during FY2017 to FY2021 are written off so far, and the same 1.8% failed within five years; both are floors. A feasibility study for an Illinois center has to measure demand by age band within a realistic drive, set enrolment against licensed capacity and staffing ratios, test tuition against what families nearby pay and any subsidy mix, and show debt service coverage at a ramp the operator can staff. The appraiser will value the building on its income and its reuse, so the study should give both.

A limitation sits under every figure: the code Illinois centers use also holds child care run from a provider's own home, and the two cannot be split, so some of these loans finance in-home care rather than a stand-alone center.