Child Care Center Feasibility Study in the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Metro Area

A child care market tilted toward childcare

In Philadelphia-Camden-Wilmington, child care centers are overweight in SBA lending: the location quotient is 1.58x, the class is 3 of 39 locally, and the area is 6 of 493 nationally. But the typical loan is lighter than the national one, with a median of $389,000 that is 0.86x the national median for the class. Between FY2017 and FY2026 SBA approved 305 loans, worth $232.3 million. The middle half of loans runs from $125,000 to $975,000, and franchised centers make up 27.5%.

Geography across state lines

The record follows project counties through four states. Philadelphia County has 95 loans, Montgomery 49, Chester 34, Delaware County 29, Burlington in New Jersey 26, Camden 22, New Castle in Delaware 20 and Bucks 15. SBA 7(a) accounts for 280 loans and SBA 504 for 25, a respectable 504 presence for a service class. Approvals ran steadily, from 19 in FY2018 to 39 in FY2024, with FY2026 dollars at $32.9 million across 34 loans.

The holders

Wilmington Savings Fund Society FSB holds 41 7(a) loans worth $39.0 million, so its tickets are far bigger than those of TD Bank, National Association, which holds 39 loans worth only $5.7 million. Trailing them are Wells Fargo Bank National Association with 18 loans, Manufacturers and Traders Trust Company with 17 and Meridian Bank with 14. In the 504 program Empire State Certified Development Corporation holds 10 loans worth $9.7 million, while Trenton Business Assistance Corporation and the Pennsylvania company South Eastern Economic Development hold 5 each. Holder means whoever SBA currently shows for the loan, and these figures describe holdings, nothing more.

Losses, withheld rates and a code that is shared

Cancellations after approval are at least 14.3% for FY2017 to FY2024 approvals. Charge-offs reach at least 4.4% among 113 funded loans from FY2017 through FY2021. Two other rates, held back at the source, appear with no number; neither is zero. Because one industry code spans centers and in-home child care alike, some providers in these totals are not centers in the usual sense.

Testing a Delaware Valley center

A study should map licensed capacity in the immediate trade area, look at the age profile of households within reach of the site and not the whole metro, and test tuition against the staffing that state ratios require. Because the median is modest, a project here is often a conversion or a smaller center, so a study should be explicit about whether the building is owned or leased. Pennsylvania, New Jersey and Delaware each license child care differently, and the statutes that govern center licensing differ among Pennsylvania, New Jersey and Delaware. The statement and holder note on the page apply to the figures above.