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

Child care: charge-offs and cancellations

Illinois child care centers drew 372 SBA 7(a) loans and $262.3 million in FY2017 through FY2026, ten full fiscal years. Two measures matter for a lender. The first is loss: of 140 loans in the FY2017 to FY2021 cohort, 2.1% stand charged off as of today, and the same 2.1% by the five-year mark. The second is cancellation: 13.5% of FY2017 to FY2024 approvals were cancelled at minimum, and 15.6% if undisbursed loans count, which means a share of approved centers did not go on to receive funds under this loan. Read both as floors.

Loan size and place

The median of $326,000 is 0.84x of the 7(a) median for child care nationally, with the central half from $134,200 to $725,175. Franchise loans are 17.2%. Child care ranks 4 of 39 in Illinois, and the state ranks 8 for the program. Cook County has 212 loans, the heart of the book, with DuPage at 27, Will at 25, Kane at 22 and Lake at 19.

Lenders

The Huntington National Bank holds 50 loans for $17.9 million. U.S. Bank, National Association holds 27 for $15.9 million, Byline Bank 26 for $26.8 million, JPMorgan Chase Bank, National Association 23 for $6.8 million and Live Oak Banking Company 15 for $27.8 million. Byline and Live Oak carry the highest dollars per loan. SBA reports the current holder of each loan.

The coding limit

The industry code does not divide centers from in-home family care, which it also holds, so some of the smaller loans here may belong to a provider working from a residence and not to a commercial building. A reader sizing a center should lean on the upper half of the range.

Years

Approvals rose to 58 loans in FY2025 after 25 in FY2021, and FY2026 recorded 39 loans worth $30.1 million.

Testing an Illinois center

A study of an Illinois child care center should test licensed capacity against enrolment by age group, staffing ratios and wages, tuition against local families' means, and the state's licensing timeline, since the cancellation floor shows that a good many approvals never reach closing. It should compare the build-out budget with a median near the figure shown, show coverage at a gradual enrolment ramp, and ask the appraiser what a buyer outside child care would pay for the building should the centre close.