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

Mid-sized child care loans and rising volume

Maryland child care centers borrowed at a $345,000 median under SBA 7(a), 0.89x of the all-state 7(a) child care median, with half the loans between $75,000 and $826,000. Across the ten fiscal years the program approved 185 loans worth $140.2 million, ranking Maryland 14 among states, with child care at 7 of 39 among Maryland asset classes. Franchise brands took 34.1% of loans, a large branded segment. Maryland child care shows no single metric that sets it apart.

Outcomes and the recent jump

At least 15.3% of approvals through FY2024 were cancelled, or 16.9% counting loans never disbursed. Maryland's 61 funded loans in that cohort show charge-offs of at least 4.9% among funded loans, with 1.6% inside five years of approval, minimums that open loans may raise. Approvals ran at 12 to 19 a year through FY2024, then climbed to 27 in FY2025 and 34 loans worth $41.1 million in FY2026, a complete fiscal year and already the biggest in dollars. Newer loans have no outcome history yet.

Lenders, counties and a coding note

Manufacturers and Traders Trust Company has 48 loans worth $12.1 million, TD Bank, National Association 17 worth $9.9 million, and Live Oak Banking Company 10 worth $23.6 million, a very large dollar total for the count. First National Bank of Pennsylvania has 8 and Celtic Bank Corporation 7. The entries are SBA's record of present holders. Prince George's County has 34 loans, Baltimore County 33, Montgomery 26, Anne Arundel 24 and Howard 17. In-home child care is filed under the same entry, so a family home looks like a center in these counts.

What a Maryland center plan has to show

The study should start from licensing: Maryland rules on group size, staff ratios and space per child fix capacity, and capacity fixes revenue. It must test demand in the specific catchment, from working families and employers, against the centers already serving it, plus tuition levels, subsidy participation and staffing costs. For franchise units, royalties and brand standards enter the cost. Build-out, safety upgrades and outdoor space belong in the budget against a loan near $345,000. The coverage ratio needs a case with the rooms only partly full, and the cancellation level argues for permits in hand before commitment.