Child Care Center Feasibility Study in Louisiana

A mid-ranked state with a high local standing

Child care center lending in Louisiana totals 75 loans between FY2017 and FY2026, worth $37.2 million. The state ranks 31 of 53 for the class, but child care center ranks 6 of 39 among the classes financed inside Louisiana, so within the state this is a well-used lending category. The location quotient of 1.07x puts the share a little above the national figure. The median loan of $322,100 is 0.71x the class median nationally, meaning Louisiana centers are financed well below the typical size elsewhere. Half of all loans sit between $151,750 and $805,000.

Limitation, mix and lenders

Our limitation line is blunt: the data blends licensed centers with providers working from a home. The same NAICS code covers in-home care, so some loans here may be small residential operations and not licensed centers. That helps explain the lower median, and a borrower planning a center should not benchmark against a home provider. By program, 68 loans sit under SBA 7(a), 7 under SBA 504. Northeast Bank shows 7 loans and $886,500, Newtek Bank, National Association 6 loans and $2.2 million, and BankFirst Financial Services 5 loans and $2.4 million. These are the lenders with at least 5 loans, and the spread in dollars per loan is large, from small working-capital deals to real estate purchases. The franchise share of 1.3% says almost none of these are branded operators.

Louisiana cancellation runs 7.7% as a floor across the FY2017 to FY2024 cohort of approvals, and the ceiling matches at 7.7%, so the two measures agree and few loans linger undisbursed. That is a lower cancellation figure than many cells show, though it remains a floor. Louisiana's charge-off rate is held back: too few seasoned loans, under 30, support a published rate. We print nothing there, and silence is not a claim of zero losses.

What a Louisiana study must test

East Baton Rouge shows 15 loans, Ascension 12 and Jefferson 11, with Orleans at 6, so activity is spread across Baton Rouge, its suburbs and the New Orleans area. A Louisiana study should size enrollment demand among working households near the site, the competing licensed capacity, and the state licensing rules for staffing ratios and square footage per child. Cost has to include playground, safety and kitchen requirements. Debt service coverage depends on how fast enrollment fills; the record of 15 loans in FY2025 and 12 in FY2024, against 4 in FY2017, suggests rising interest, which also means rising competition. The appraisal needs to say how a purpose-built center would be valued if tuition income falls.