Child Care Center Feasibility Study in the San Jose-Sunnyvale-Santa Clara, CA Metro Area

Child care centers in the San Jose-Sunnyvale-Santa Clara area borrow at sizes well above the class nationally. Between FY2017 and FY2026 the file shows 77 approvals worth $91.3 million, and among 493 metro and micro areas the area stands 31st for the class. The location quotient of 1.59x says the metro leans toward child care more than the nation does, and child care centers rank 4 of 39 among the classes lending here. A $700,000 median loan sits at 1.55x the class's national median, which means a borrower here typically carries a bigger note than child care operators elsewhere.

Loan sizes, programs and the lender record

The middle half of loans runs from $330,000 to $1.6 million, a wide band. Program choice favors 7(a) with 56 loans against 21 for 504; franchise units make up 16.9% of loans, and the remainder are unflagged. Among holders, The Mortgage Capital Development Corporation stands out with 8 loans totaling $15.2 million, a heavy average per loan. Yearly volume climbed late in the series: 15 loans and $13.2 million in FY2025, after 10 loans and $7.3 million in FY2024, and FY2026 shows 10 loans for $14.7 million.

Reading the floors and the gaps

Cancellation after approval is at least 11.5% for FY2017 to FY2024 approvals, and that is a floor, not a forecast. Loan Analytics withholds the ceiling version of cancellation, which includes undisbursed loans, and the loss rate on charge-offs for this cell, and also blanks the FY2017 and FY2022 rows, since each rests on too few loans. Absent is not zero. Everything shown comes from SBA's file of loans this metro holds or held, with metro membership set by each project's own county on the July 2023 map, so a loan in an unplaceable county appears in no metro at all.

Questions the study must answer

The class code also takes in-home operators, because home-based family providers are lumped in with centers; a study therefore has to admit that the benchmark mixes formats and then pin down which format the project is. Demand work should count licensed seats against the under-school-age households within a realistic drive of the site. Construction or conversion cost deserves testing against the $700,000 median, because a licensed center has classroom, play-area and egress requirements that raise outlay. The debt service coverage test should assume a slow enrollment ramp, with staffing held at licensed ratios. The appraiser will want the income view tied to real tuition and capacity.