SBA 504 Child Care Center Feasibility Study in South Carolina

Carolina centers borrow big: a $1.3 million median, 1.72x the nationwide 504 child care mark, with 26 loans spreading from $560,250 to $1.8 million across the middle half. The cell totals $31.4 million. Child care holds third place of 39 in the state while South Carolina is 24th when loans are counted. Franchised loans are 23.1%, a high share that suggests branded early-learning centers among the borrowers. The scale, well above the national norm, is the cell's key difference.

Two development companies

Appalachian Development Corporation leads at 10 loans and $10.8 million; Certified Development Corporation of South Carolina follows at 7 loans and $6.6 million. Both are companies that hold notes under 504, and the figures carry no assessment. Greenville County has 7 loans, Charleston 6, York 4, and Berkeley, Lancaster and Lexington 2, with Beaufort, Horry and Pickens 1.

Years

FY2017 had 2 loans and $2.1 million, FY2018 and FY2019 3 each, FY2020 a single loan of $1.8 million, and FY2021 7 loans and $5.9 million, the busiest year. FY2022 had 5 and $6.1 million. FY2023 to FY2026 had 1, 2, 1 and 1 loans respectively, the last at $734,000. After 2022 the class thinned markedly, and a study should ask about the building costs and rates that have affected new centers.

What is not shown

Carolina child care cohorts are too small for any cancellation or loss percentage to be shown. Home-based care shares the center code, so smaller in-home businesses may be among the loans counted.

A South Carolina center study

Loans this large suggest purpose-built centers more than renovated storefronts. The study should therefore test licensing and capacity, the supply of working families near the site, tuition against local incomes, competing centers, and staffing. Teacher recruitment is often the limit, so wages and turnover matter. For a franchised concept, add the franchisor's site rules and fees. With the building financed, the appraiser should price it as a center and as something else, and coverage should be tested while enrolment fills slowly. Add the cost of playground equipment, security systems and kitchen approvals, which often exceed what a first budget assumes.