SBA 504 Child Care Center Feasibility Study in Colorado

Child care at twice the national scale

Colorado child care centers under 504 borrow about double the national pattern: the midpoint of $1.5 million is 1.97x the national 504 midpoint for centers, across 45 loans and $63.7 million. The middle half runs from $620,000 to $2.1 million. A third of the loans, 33.3%, are franchised. By loan count Colorado sits at rank 11 nationally for this slice, and inside the state child care takes place 4 of 39, near the top of what 504 buys here.

One development company leads

B:Side Capital holds 30 of the 45 loans, with $41.5 million, a concentration that dwarfs the rest: Preferred Lending Partners follows with 7 loans ($8.1 million), then Mountain West Small Business Finance with 5 loans ($8.4 million). The holder is as SBA lists it today, and the numbers describe loans held, not how any company treats a borrower. Jefferson County has 11 loans, Denver 9 and Douglas 7, with Arapahoe and El Paso at 4. FY2023 stands out with 10 loans worth $11.8 million.

Unfinished projects and one coding limit

Colorado child care approvals through FY2024 have a cancellation floor of 5.0%, but the ceiling climbs to 12.5% once undisbursed loans are treated as dead, a gap that points to projects still under construction. SBA publishes no charge-off rate here because the funded cohort is short of its minimum. Home-based providers sit in the same industry code as centers, so a few of the loans may belong to operators without a building of their own.

Real estate first: a Colorado child care study

Loans of this size usually build or buy a center, so the study begins with the real estate. Show the site, the licensed capacity it supports under Colorado rules, and the construction or conversion cost per child space. Demand is shown by working households near the site, the waitlists and tuition at nearby centers, and employer support. Payroll dominates operating cost, so present the staff ratios by age group and a hiring plan. With a third of loans franchised, state whether a brand is involved and what it charges. Coverage must be tested through a long fill period and a case in which enrollment stalls. The appraisal must say what the building brings if the operator fails, since a purpose-built center is a special-purpose property.