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

A larger ticket than the national center

Child care centers financed through SBA 7(a) in Colorado are expensive projects by the standard of the class. The median loan is $700,000, 1.81x what a child care center borrows nationally through 7(a), and that ratio, rather than volume, is what sets this cell apart. Across FY2017 to FY2026 the state logged 157 approvals, worth $210.9 million in gross dollars. Colorado ranks 18 among states for 7(a) child care center loans by number, and the class stands 10 of 39 within the state.

The middle half of loans runs from $338,400 to $1.7 million, a wide band that reflects both leased-space conversions and purchases of whole buildings. Franchise-affiliated borrowers account for 38.2% of loans, which is high enough that a study should say whether the project is a branded center or an independent one, because the two have different cost structures and different sources of enrollment. One coding limit applies: home-based providers are filed with centers, because the industry code holding these centers also covers in-home child care, so the record blends two business models that a study would treat apart.

Lenders and counties

SBA names a current holder for each loan, and Live Oak Banking Company holds 15 of the 7(a) loans, worth $34.9 million; The Huntington National Bank holds 12 worth $7.4 million; Wells Fargo Bank National Association has 9 loans at $17.5 million, matched on count by U.S. Bank, National Association with $7.7 million; PNC Bank, National Association holds 7 worth $21.0 million. These are records of loans held, and nothing here describes what any of them requires. Jefferson County leads with 39 loans, followed by Arapahoe with 21, Adams with 19, Douglas with 18, and Denver and El Paso with 16 each. Approvals reached 26 in FY2023 and fell to 8 in FY2026.

The cancellation floor for Colorado child care loans approved through FY2024 is 7.5%, or 8.3% if approvals still awaiting disbursement are counted as cancelled. Colorado's FY2017 to FY2021 funded group has 64 loans, and its recorded charge-offs stand at 0.00%, with the five-year figure identical. That reads as no charge-offs recorded so far, not as a guarantee, since open loans can still fail and a floor only counts what SBA has already recorded. The median loan, not the outcome rate, separates this cell from both of its parents.

Tests a Colorado child care study must pass

A study for this loan has to start with enrollment: licensed capacity, the age mix, and the number of working families inside a practical drive, set against the centers already operating there. Staffing cost is the next test, since ratios fix how many caregivers each room needs regardless of how full it is. With loans commonly in the high six figures and often much larger, the study should reconcile build-out or purchase cost to tuition at a realistic fill rate, show debt service coverage with a slower ramp beside the base case, and give an appraiser a basis for valuing a property whose use is specialised.