Child Care Center Feasibility Study in the Kansas City, MO-KS Metro Area

Kansas City child care: bigger loans, settled cancellations

Child care centers in the Kansas City area account for 97 loans and $89.5 million over FY2017 to FY2026, 25 of 493 areas for the class and fourth of 39 locally. The location quotient is 1.49x. The median loan of $574,200 is 1.27x the national class midpoint, a distinctive size, and the quartile edges sit at $293,000 and $1.0 million. Franchised centers are 36.1% of loans, a larger brand presence than many classes show.

A cancellation figure with no uncertainty

Cancellation after approval is 9.6% for FY2017 to FY2024 approvals, and the upper bound that counts undisbursed loans as cancelled is the same 9.6%. A lender or borrower can therefore treat that number as exact for the cohort. For charge-offs the percentage is not shown, the numbers being thin, and not shown is not zero. The code behind this class also holds in-home child care, so family child care homes are included and cannot be separated from centers.

Programs and holders

The program split is 81 loans on 7(a) and 16 on 504. Heartland Business Capital, Inc. is the 504 holder listed, with 6 loans worth $5.2 million. In 7(a), Wells Fargo Bank National Association is named with 11 loans worth $7.8 million, U.S. Bank, National Association with 7 worth $3.7 million, and First National Bank of Omaha and Arvest Bank with 5 each, worth $7.2 million and $2.5 million. The list is SBA's tally of holders, not a judgement of anyone's policy.

Two states and the questions to ask

Johnson County, Kansas holds 51 loans, Jackson County, Missouri 22, Clay County 11 and Wyandotte 5, so the weight falls on the Kansas side. Licensing and staffing-ratio rules differ between Kansas and Missouri. Volume was highest in FY2020 at 17 loans and $22.3 million, and FY2026 shows only 6 loans and $7.5 million. For a Kansas City child care project, the study has to examine enrolment demand by age group and the incomes of working households in the catchment, the rules of the licensing state, competing centers and their waiting lists, build or purchase cost against loans near the midpoint, and the valuation of a specialised building. A loan is counted in the market when its project county name is on the 2023 metro map.