Child Care Center Feasibility Study in Texas

The largest child care market, with larger loans

Texas leads every state in SBA child care lending, ranking 1 of 53 with 1,151 approvals worth $1.56 billion from FY2017 to FY2026. What sets the cell apart, though, is loan size. The median Texas center loan is $762,000, 1.69x the class median nationwide, and that is the figure that differs from Texas lending overall and from child care in the rest of the country. The middle half of loans runs from $315,000 to $1.9 million, which suggests purpose-built centers and owned real estate more often than leased suites. A location quotient of 1.57x adds that centers carry far more weight in the Texas SBA book than nationally, though they rank only 6 of 39 among classes in the state.

Franchise systems and big-ticket lenders

Franchising is a large part of the story: 38.5% of Texas center loans went to franchised operators. SBA 7(a) carried 981 loans and SBA 504 carried 170. Wells Fargo Bank National Association leads the 7(a) count with 68, but Live Oak Banking Company holds 45 loans worth $156.5 million and PNC Bank, National Association holds 45 worth $117.7 million, which is where the larger dollars sit. Of the certified development companies, Capital Certified Development Corporation is busiest, with 58 loans and $85.2 million. Harris County alone accounts for 244 loans; Collin and Tarrant follow with 105 and 103. FY2026 set the dollar high of the series at $214.5 million on 136 loans.

Floors, and what the study has to carry

Cancellations took at least 11.5% of Texas center approvals made from FY2017 through FY2024, and 12.7% on the ceiling that also counts undrawn loans. Charge-offs have reached 2.9% of the 478 Texas center loans that funded in FY2017 to FY2021, 2.1% inside five years, and both can still rise. With tickets this large, the margin for error in a study is small. It has to show enrolment demand by age group in the specific suburb, not the metro, and account for the centers already open and those permitted nearby. It has to price construction and land at today's costs, set tuition against local incomes, and show debt service coverage through a lease-up that may take many months to reach licensed capacity. Where a franchise is involved, the brand's unit numbers need checking against this particular site, and the appraisal should be supported by the same income case.

The code has a known gap: family child care homes sit in the same code as centers and cannot be separated, so the count includes some in-home providers.