Child Care Center Feasibility Study in Missouri

Missouri centers borrow below the national median

Missouri's child care centers borrow less under SBA than centers nationally, and the median is where this cell separates. Across 173 approvals from FY2017 to FY2026 totalling $117.2 million, the Missouri median is $340,000, or 0.75x the national class median, a gap our test finds wide enough against Missouri lending overall and against centers countrywide. Missouri's central half of approvals sits between $150,000 and $755,000, a range that fits the purchase of an existing center or a leased build-out more often than new construction. With a location quotient of 1.05x, child care holds about its national share of Missouri's SBA lending; the state ranks 19 of 53 for these loans, and centers are 6 of 39 among Missouri classes.

Development companies carry Missouri's 504 book. Rural Missouri, Inc. and St. Charles County Economic Development Council hold 11 loans each, worth $13.0 million and $7.5 million, and Enterprise Development Corporation holds 7. SBA 504 carried 38 approvals in all, and SBA 7(a) 135. Among 7(a) holders, U.S. Bank, National Association has 12 loans worth $7.6 million, and The Central Trust Bank also has 12 but worth only $903,300, small credits for equipment or working capital. The Bank of Missouri holds 7, CDC Small Business Finance Corp. 7 worth $350,000, and Guaranty Bank 6. Franchise concepts are 16.2% of the count.

Losses that arrive early

Missouri's outcome record is less forgiving than its loan sizes suggest. Of 70 Missouri center loans funded in FY2017 to FY2021, 5.7% ended in charge-off, a floor, and 4.3% failed before their fifth year, which puts most of the losses early. Missouri cancellations run at 11.9% of FY2017 to FY2024 approvals, or 14.1% at the ceiling if undisbursed loans are added. For a lender, early charge-offs argue for underwriting the first years of operation hardest.

Testing a Missouri child care center

The Missouri record clusters in the metros: Saint Louis County holds 37 approvals, Saint Charles 27, Jackson 22, Boone 14 and Clay 11. Licensed capacity already operating in the trade area has to be counted and set against families who need care within a short commute, including any reliance on subsidy that ties revenue to state reimbursement. Staffing belongs in the budget at the ratios the license requires, since payroll is the largest line. Coverage needs an enrollment ramp consistent with the early losses this record shows, not a full center from opening day. Where the loan buys real estate, the appraisal must value a building with limited alternative use. One caution on the data: home-based family child care shares the center code, so these Missouri figures blend both kinds of provider. Volume peaked at 28 approvals in FY2025.