Child Care Center Feasibility Study in Maryland

A record year to close the Maryland series

Child care is one of Maryland's leading SBA classes, ranked 5 of 39 in the state, and a location quotient of 1.31x shows it carrying more weight among Maryland SBA approvals than nationwide. Over FY2017 to FY2026 Maryland approved 206 child care loans for $176.2 million, ranking 17 of 53 among states, and FY2026 was the busiest year of the series, with 38 loans and $49.8 million. The median loan is $405,600, 0.90x the national median for the class. Maryland's headline figures hold no outlier, so the cell's character lies in its weight and its recent surge.

Franchise centres and the lenders behind them

Franchised centres take 35.0% of Maryland's loans, Manufacturers and Traders Trust Company leads the 7(a) list by a distance with 48 Maryland loans for $12.1 million and TD Bank, National Association holds 17 for $9.9 million; Live Oak Banking Company's 10 loans, worth $23.6 million, sit at the large end, alongside First National Bank of Pennsylvania (8) and Celtic Bank Corporation (7). SBA 7(a) carried 185 loans and SBA 504 21, with Business Finance Group, Inc. holding 16 of the 504 loans for $26.0 million. Maryland's middle half spans $90,000 to $997,750. Baltimore and Prince George's counties have 35 loans each, Montgomery 31, Anne Arundel 29 and Howard 19.

Cancellation floor and slow-burning losses

Maryland centres approved over FY2017 to FY2024 saw at least 15.8% of their loans cancelled, a share that reaches 18.0% once loans still undisbursed are added. Among the 70 Maryland centres funded over FY2017 to FY2021, 4.3% have since been charged off, yet failures within five years total only 1.4%, so losses here kept arriving after the early years. Both are floors on loans still open. For a borrower, the gap between approval and funding is the first risk to manage, because licensing inspections and build-out can slip; for a lender, the later losses point to enrolment and staffing over the full term, not just at opening.

A Maryland child care study has to test enrolment demand by age band, infants, toddlers and preschool, against licensed capacity and waiting lists in the specific county, since demand in Montgomery or Howard is not demand in a smaller market. Cost covers the building or lease, a fit-out that meets licensing rules, and enough working capital for the Maryland ramp. Coverage of the loan should be demonstrated on a believable enrolment curve and staffing ratio, never at full capacity. The appraisal must recognise that a child care building has a narrow set of buyers, so the study should give the lender a value for the property both as a centre and as general space.

The code behind this class also holds family child care run from homes, so home-based providers cannot be separated from centres in Maryland's figures.