Child Care Center Feasibility Study in Washington

Washington centers borrow more per deal

Washington's child care loans are large by the standards of the class. The median of $634,000 is 1.40x the national median for centers, and it differs from both centers nationwide and Washington's all-class median. In volume the state is mid-pack: 209 approvals worth $238.5 million from FY2017 to FY2026 rank 16 of 53, child care places 10 of 39 among Washington classes, and the location quotient of 0.78x puts the class below its national weight.

King County and the largest tickets

King County alone accounts for 111 approvals, with Pierce at 24, Snohomish 19, Spokane 11 and Clark 10. The middle half of Washington loans runs from $275,700 to $1.5 million. Live Oak Banking Company holds 13 loans totalling $38.0 million, far larger tickets than any other lender listed, against U.S. Bank, National Association's 19 loans worth $12.6 million and Columbia Bank's 14 worth $3.5 million. Enterprise Bank & Trust has 14 worth $15.2 million and KeyBank National Association 12. Among development companies, Evergreen Business Capital has 13 loans worth $19.4 million and Northwest Business Development Association 10 worth $17.4 million; SBA 504 carried 28 loans in all, against 181 under 7(a). Franchises hold 15.8%. Lending has grown, to 28 loans worth $39.6 million in FY2025 and 27 worth $40.4 million in FY2026.

No charge-offs, a cancellation gap

Washington's 82 center loans funded over FY2017 to FY2021 include no charge-off, so Washington's loss floor is 0.00%, and the five-year figure matches it. Cancellation is the live risk, at a floor of 12.3% for Washington approvals across FY2017 to FY2024, climbing to 16.2% when undisbursed loans are counted, a gap made up of loans still waiting to fund.

A feasibility study for a Washington child care center has to justify a ticket near $634,000. It should show enrolment demand for each age room in the Washington neighbourhood it will serve, set build-out or acquisition cost against licensing requirements, and price teaching staff realistically, because wages decide the margin. Debt service coverage needs to hold through the enrolment ramp, not only at full capacity, and the appraisal has to support the property on its own value rather than on the center's income alone. Given the cancellation ceiling, the study should also show that the construction schedule and licensing path are settled before the loan is approved.

Washington's figures also hold in-home providers, since one code covers centers and family child care homes alike.