SBA 504 Child Care Center Feasibility Study in Wisconsin

Dane County is Wisconsin's 504 child care market

Under SBA 504, Wisconsin's child care centers are concentrated in one county: Dane has 22 of the 49 loans, Waukesha 7, Brown 3, and Eau Claire, Milwaukee and Saint Croix 2 each. The ten fiscal years carry $51.3 million in gross dollars. A median of $822,000 is 1.08x the nationwide level and half of loans fall between $363,000 and $1.4 million. Franchise share is 10.2%. By number of loans Wisconsin stands at 10 among states for this program and class, whereas child care holds a lofty 5 of 39 within Wisconsin's own classes. The page carries no lender listing.

Approvals through time

Activity rose from 3 loans and $1.8 million in FY2017 to 7 loans and $5.8 million in FY2020, then 5 loans and $7.8 million in FY2023, 8 loans and $9.8 million in FY2025 and 3 loans and $2.3 million in FY2026. Dollars per loan grew in later years even where the count held.

At least 10.5% of approvals through FY2024 were cancelled; counting loans that never disbursed raises that ceiling to 15.8%. The spread is wide, and it signals that a share of approvals sat undisbursed in the data. For charge-offs, the cell has too few early funded loans to support a rate, so Loan Analytics prints neither a figure nor a zero.

Code limits and the Wisconsin study

The code groups family child care in a home with centers, so these totals cannot isolate centers. A feasibility study for a Wisconsin center financed under 504 should begin with the property, because the program supports owned fixed assets: land cost or building purchase, construction or renovation, outdoor space, and parking and drop-off flow. Enrolment must be tested by age band and location, against licensed capacity and nearby competitors, with a ramp to full enrolment and a slow case. Staffing ratios drive payroll, and tuition has to sit within what area families pay. Cash flow must carry the property cost plus operating expense, so coverage should be shown on an owner-occupant basis. An appraiser values a building designed around one use, so the study should name what else it could become if the operator ever left.