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

Small loans, one-in-six franchised

Delaware child care loans are modest. With a $150,000 median at only 0.39x the nationwide level, and ordinary loans from $63,750 to $485,250, the profile fits a leased building more than a purchase. Child care in Delaware is therefore a small-ticket business in this program, and the lenders involved are funding fit-out, equipment and opening costs. SBA approved 30 loans between FY2017 and FY2026, worth $12.5 million. The state ranks 42 among states by loan count, though inside Delaware the class is 6 of 39. Franchise affiliation is 16.7% of loans. Delaware's few counties explain the geography: New Castle has 17 loans, Sussex 8 and Kent 5.

The holders

Manufacturers and Traders Trust Company: 8 loans, $630,700. Wilmington Savings Fund Society FSB: 6 loans, $3.5 million. The difference in average size is large, so the holders seem to carry different parts of the market. As SBA lists present holders, this says nothing about their lending standards. Annual volume peaked at 8 loans and $2.4 million in FY2024. FY2020 had only 2 loans, but with $3.0 million, and FY2023 and FY2025 each had a single loan.

Gaps in the record

No cancellation or charge-off percentage is published, as the cohort cannot carry one, and a missing rate is not zero. The page therefore says nothing about how many Delaware centers that borrowed went on to struggle. Family child care homes are grouped with centers by the industry code, so some of the smaller loans may belong to home-based providers.

What a Delaware child care file must demonstrate

The central test is whether enough families will enrol at a price they can pay. The file should count children by age within the catchment, the share of parents in work, and the licensed capacity already open. It should show tuition against local alternatives, whether subsidies play a part, and how fast classrooms fill. Staff ratios and licensing determine the payroll, and the build-out of rooms, outdoor space and safety features should be costed by item. Where the loan is small, working capital for the first months may be the main use, and the file should say so. A downside case with slower enrolment must still cover the payment. Staff turnover is a constant in the class, so the file should show how hiring, training and pay will keep classrooms staffed at licensed ratios throughout the first year.