Child Care Center Feasibility Study in Rhode Island

A small state where 504 financing does the work

Rhode Island's file closes at 64 child care center loans, $21.3 million approved, between FY2017 and FY2026. The state is 36 of 53 for the class, yet child care is 3 of 39 among the classes financed in Rhode Island, and the location quotient of 1.41x shows an above-average concentration. The distinctive feature is the program mix: 37 loans are SBA 7(a) and 27 are SBA 504, a far heavier use of 504 than most states show for child care. Centers here are buying and improving buildings with long-term fixed-asset financing.

The median tells the same story from another side

The median loan is $223,500, which is 0.49x what the class borrows nationally, and that low figure is the distinctive metric. Half of the loans lie between $132,500 and $382,750. The 504 structure splits the financing among a lender, a development company and the borrower, so the SBA-guaranteed portion looks smaller than the whole project. A reader comparing project costs with this median should remember the 504 pattern. The franchise share is 0.00%.

Ocean State Business Development Authority leads the 504 list with 15 loans and $6.1 million, followed by New England Certified Development Corporation with 6 loans and $1.4 million. On the 7(a) side, Beacon Bank and Trust has 5 loans and $2.6 million, and Santander Bank, National Association has 5 loans and $1.7 million. Rhode Island's data folds home-based care into the same line as centers, so a few of the smaller loans may be home providers.

Completion, losses and what to test

The cancellation floor is 11.5%, and the ceiling is 19.2%, a large gap that means many approvals were still undisbursed. A borrower should expect that a project may sit approved for a long while before funds move, often waiting on construction or licensing. We publish no Rhode Island charge-off rate, since the seasoned group is under 30 loans, and the blank carries no claim of zero losses. A study in Rhode Island should test enrollment demand, particularly in Providence, which has 34 loans, and in Kent with 14 and Washington with 8. It should price the building and licensing, model coverage of the 504 debt, and ask the appraiser what a vacant center would fetch. The record peaked at 9 loans in FY2022, FY2024 and FY2025, with only 3 loans in FY2026.