Child Care Center Feasibility Study in the Los Angeles-Long Beach-Anaheim, CA Metro Area

Child care in the Los Angeles area

SBA lists 232 child care center loans in the Los Angeles area for FY2017 to FY2026, worth $206.3 million. The area stands 10 of 493 for the class, but child care is only 11 of 39 in the local mix, and a location quotient of 0.46x means it takes well under the national share of lending. Where the cell differs from the class elsewhere is ticket size: a median of $510,000, 1.13x the class midpoint nationwide, and quartiles of $150,000 and $1.3 million.

Programs, franchises and one code

The loans divide into 181 under SBA 7(a) and 51 under SBA 504, so a fifth or so of the volume rides on the real-estate program, which suits operators who own their buildings. Franchised centers hold 7.8% of loans. One code serves child care centers and in-home child care alike, so family homes cannot be separated from centers here; the study should say which model is financed and treat class averages with care.

Holders and counties

Four development companies share the 504 table: The Mortgage Capital Development Corporation (9 loans, $14.2 million), Business Finance Capital (9, $5.8 million), Advantage Certified Development Corporation (8, $3.9 million) and California Statewide Certified Development Corporation (7, $10.2 million). Within 7(a), U.S. Bank, National Association appears with 19 loans for $17.1 million and Northeast Bank (ME) 11 for $1.3 million, while three banks sit at 7 loans apiece: East West Bank ($9.5 million), Enterprise Bank & Trust ($7.2 million) and JPMorgan Chase Bank, National Association ($545,000). SBA's holder data is a record, not a ranking of anyone's policy. Los Angeles County contributes 172 loans and Orange County 60.

A narrow cancellation range

Two cancellation bounds meet here: 12.0% floor-wise for FY2017 to FY2024 approvals, and 12.0% again as a ceiling once undisbursed loans are counted, so almost no Los Angeles child care loans sit in the grey zone between them. No rate of charge-offs is printed, since too few loans stand behind it, and unprinted is not nil. Placement in the area follows project county names on the 2023 metro map. Financing a centre calls for a study that tests enrolment demand by age group and the working population nearby, licensing and staffing-ratio rules, build-out or purchase cost, debt service coverage against the median ticket, and a valuation of a specialised building.