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

Independent centers of moderate size

In Louisiana the child care loans under SBA 7(a) read as independent operators of moderate size. Franchise ties account for only 1.5% of the 68 loans, the median is $311,050, 0.80x the nationwide figure for child care centers, and most loans lie between $150,000 and $815,000. The record totals $33.9 million. Louisiana is 28th among states by count, and child care centers are sixth of 39 inside the state, a high placement relative to the state's national standing.

Home-based and center-based child care are not separated in these counts, because in-home child care shares a code with centers. A home-based provider with a small loan and a licensed center with a building and dozens of children sit in one count. A study should state which model it analyses.

Holders and parishes

Northeast Bank holds 7 loans worth $886,500. Newtek Bank, National Association holds 6 worth $2.2 million and BankFirst Financial Services 5 worth $2.4 million, so the averages differ widely. SBA names the holders and nothing more; it does not describe any bank's requirements. East Baton Rouge has 15 loans, Ascension 12, Jefferson 10, Orleans 6, Rapides 4, and Caddo and Livingston 3 each.

Approvals were 2 in FY2017, 6 a year through FY2019, and then rose to 12 in FY2024 and 15 in FY2025, with $6.8 million. So most loans are recent and have had little time to show results. Louisiana's cancellation floor on approvals up to FY2024 is 8.7%, matched by the ceiling. Too few early funded loans exist in Louisiana to support a charge-off rate; none is shown and the blank is not zero.

Testing a Louisiana child care project

Enrollment decides everything, so the study should estimate the children of working households within a practical distance, by age band, and compare them with the licensed capacity already there. Licensing rules usually fix staff ratios and space per child, which means cost rises in steps as rooms open, and the plan should show the enrollment at which each room pays for itself. Tuition must be set against local household incomes and against what subsidies, if any, will pay, and the timing of those payments is a working capital question. Show a realistic fill schedule, with the payment covered at a lower census, and explain whether the loan buys a building, a lease build-out or an existing center. The appraiser will treat a purpose-built center as a special-use property, so address resale.