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

Iowa child care center lending: dollars and loan size

Counting FY2017 to FY2026, Iowa shows 42 SBA 7(a) approvals for child care centers, adding up to $19.0 million in gross dollars. From $80,000 to $518,600 covers the middle half of the Iowa loans, around a median of $169,650. On the SBA 7(a) scale nationwide, Iowa child care centers read 0.44x, which puts Iowa below the national figure for child care centers. Franchised borrowers account for 11.9% of the child care centers loans in Iowa.

In the state table for SBA 7(a) child care centers, Iowa sits at rank 37; in the Iowa class table, child care centers sit at 8 of 39. Iowa child care centers reached their top year in FY2021 with 7 loans and $4.3 million, while FY2026 shows 1 loans and $253,000. Iowa ranks well down the state table for 7(a) child care lending, and loans here run well below the national median, a modest footprint for the program.

No holder table exists for 42 Iowa loans, so a child care center borrower asks lenders in Iowa directly. By area, Polk leads with 19 loans, then Linn with 5 and Clinton with 2. Lower on the list are Dallas 2, Johnson 2 and Madison 2.

What the Iowa outcome figures leave out

For Iowa child care centers approved by FY2024, 5.4% or more ended in cancellation, and counting undisbursed loans changes nothing, so 5.4% is also the ceiling. Charge-offs cannot be given: too few Iowa loans were funded, which says nothing about Iowa either way. Iowa centers share a code with in-home care, which means some of these loans are small home businesses. Only SBA loans are counted in Iowa.

Testing an Iowa center

With a median near $169,650, many of these loans are small leased centers, so rent and payroll matter more than any building. Break enrollment out by age group, since infant rooms need more staff than rooms of older children and shape revenue per room. Families around Polk decide on trust and hours; list the licensed providers and what they charge. A 7(a) request may bundle equipment, build-out and working capital, so split sources and uses line by line. Playground and safety costs are real. Test payments when enrollment lags capacity in the first year.