SBA 7(a) Child Care Center Feasibility Study in Alabama

Two rates stay off the page

Alabama child care centers under SBA 7(a) come with two blanks, cancellation and charge-off, because the early-year approvals are too few to support either, and a blank is not a statement of nothing. What the cell does show is the lending itself: 37 approvals from FY2017 to FY2026 worth $29.5 million, a median loan of $306,700 and a central half running from $122,500 to $716,000.

What the loans look like

The median stands at 0.79x of the 7(a) level for child care elsewhere, so Alabama borrowers take smaller loans than the class typically does. Alabama ranks 38 among states by count, while centers hold 10 of 39 within Alabama's asset types. Franchise brands appear in 21.6% of the loans, a larger share than in several neighboring states' cells. By county, Jefferson has 8, Shelby has 7, Mobile has 6, and Baldwin and Madison have 3 each.

Years

Approvals peaked at 6 loans and $6.7 million in FY2018 and reached $6.2 million on 4 loans in FY2026, with a trough of 1 loan in FY2017. No lender table is printed for the cell.

Scope of the code

A home-based provider is indistinguishable from a center in this data, since the code for these businesses also holds in-home child care. Some of the smaller Alabama loans may belong to home-based operators.

What an Alabama child care study must test

Capacity and licensing come first: the number of children the building may hold under state rules, the ratio of staff to children by age group and the space each room requires. The study should measure the number of working households in the catchment and the licensed seats already open, then forecast enrollment by month with a realistic fill-up. Tuition has to be argued from local competitors and from any subsidy program that pays part of it, and payroll should be built from the staffing ratio. A center that is purchased should be valued on earnings, not asking price. Debt service must be covered at partial enrollment, and the appraisal for a special-purpose building may be narrower than the cost of constructing it. The median of $306,700 shows what lenders usually see; a larger request needs its own case.