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

Cancellation is the signature

Indiana child care centers hold 84 SBA 7(a) loans and $75.2 million in gross dollars, 24th nationally for the pairing, with child care the 11 of 39 class in Indiana. Cancellation is the metric where the cell differs. The cancelled share starts at 22.8% of approvals, and the ceiling repeats it, so a sizable share of approved centers never reached disbursement. That deserves a lender's attention.

The median loan of $319,500 is 0.83x the national median. Half of the loans fall between $93,525 and $979,000, a very wide band. Franchises account for 36.9% of loans. The Huntington National Bank holds 9 loans, Regions Bank 6 and Old National Bank 5. Those are the holders in SBA's file, not a record of any bank's lending standards. Hamilton and Marion counties each have 19 loans, Lake has 14, and Hendricks and Vanderburgh follow with 4, so the lending clusters in a few counties.

A withheld loss rate

Indiana's funded cohort is too thin to publish a charged-off rate. Leaving it blank is deliberate, and a blank neither means zero nor vouches for a clean record. Without it, cancellation and approvals are the only outcome figures this cell can offer. Annual volume has been uneven: 11 loans and $10.1 million in FY2017, a low of 3 loans in FY2019, 15 loans in FY2025 and 12 loans and $4.4 million in FY2026.

What an Indiana child care study must prove

The industry code covers in-home care as well, which blurs centers and family child care homes, so the study should name the center's licensed capacity. It must show where enrolment comes from, which employers or neighborhoods feed the center, how many competing centers sit nearby, and what tuition families can bear. Staffing ratios drive payroll, so the model should build teacher hiring and pay by age group. With so many approvals lost before funding, a study ought to show that the site, zoning and licence are secure before the loan closes, with a dated schedule. Debt service coverage needs a slow lease-up case, and the appraisal will value business and building together.