Child Care Center Feasibility Study in New Hampshire

New Hampshire child care: small loans

Small loan size sets New Hampshire child care apart. The median is $204,500, a mere 0.45x of the nationwide child care median, with the central half of loans spanning $81,000 to $474,025. SBA approved 74 center loans from FY2017 to FY2026 totalling $29.8 million, which puts the state 33 of 53, and child care sits 6 of 39 among New Hampshire classes. A location quotient of 0.82x puts the class a little under its national weight. For a lender, the typical commitment is a fraction of what a child care loan looks like elsewhere.

The 7(a) program accounts for 50 loans and the 504 program for 24, so almost a third of the cell uses the real estate product. Franchising is only 5.4% of loans. On the 504 side Granite State Economic Development Corporation holds 13 loans and $4.0 million, ahead of the New England Certified Development Corporation, which has 6 loans worth $1.6 million. TD Bank, National Association appears under 7(a) with 8 loans and $2.2 million. A borrower buying a building will probably deal with one of the two companies.

Southern counties lead

Rockingham County has 23 loans and Hillsborough 21, with Strafford at 12 and Merrimack at 8, Belknap at 5 and Sullivan at 3. The southern tier clearly dominates. Yearly counts ran at 5 in FY2017, 9 in FY2018 and 12 in FY2020, and FY2026 shows 8 loans bringing $6.9 million, the top dollar total for any year here.

Cancellation hit at least 10.2% of New Hampshire approvals through FY2024, and 11.9% is the ceiling. Of the 35 loans that disbursed early in the window, 5.7% are charged off to date, and 5.7% failed inside five years, so the losses that occurred came early. With a cohort this small, a few more defaults would move the floor noticeably.

Is a small loan enough in New Hampshire?

A study for a New Hampshire center has to establish whether the modest median means small centers or leased, lightly improved space, and model enrollment at the capacity the building is licensed for. Demand work needs commuter patterns, since families use care near work near work or near home, and it needs the supply of seats nearby. Cost must include licensing upgrades and outdoor play space. Coverage rests on staffing ratios and tuition, and the appraisal on income capitalization with a fallback use. A data caution: the industry code also covers in-home providers, which blurs the center counts here.