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

Small tickets, a big place in the state

Child care centers are a far larger part of Nebraska's SBA 7(a) lending than the state's national standing suggests. The class sits at 5 of 39 among Nebraska's asset classes, yet the state is only 33 among states by number of child care loans. Across the window that SBA's files cover, FY2017 to FY2026, the program approved 53 such loans, for $25.2 million in all. Tickets are small. A median of $161,300 is just 0.42x the national 7(a) figure for child care centers, and the middle half falls between $76,000 and $400,000, which describes leasehold improvements, equipment and working capital far more than ground-up construction. Franchises account for 15.1% of loans.

Omaha, Sarpy County and a very thin list of lenders

The loans cluster in the Omaha area: Douglas County has 29 and Sarpy 14, leaving only 2 each for Lancaster, Lincoln and Platte and a single loan apiece in Cuming, Red Willow, Saline and York. Emprise Bank is the single lender in the program's list, with 5 loans and $1.9 million as SBA shows its current holdings. That is a statement about who holds these loans today, not a claim that other banks decline them, and a Nebraska operator should expect to canvass lenders widely. The statewide count never rose above 8 in a year, with FY2019 and FY2024 at that level, though FY2019 carried $6.9 million against only $1.7 million in FY2024.

A gap year, and cancellations

FY2023 shows 0 loans and $0, an odd pause between 4 loans and $603,800 in FY2022 and the 8 loans of FY2024. Whether it reflects lender behaviour or timing, a reader should note it rather than smooth it away. For child care approvals made through FY2024 the Nebraska cancellation floor is 9.3%, and the ceiling with undisbursed loans included also reads 9.3%. The older Nebraska loans that disbursed are too few for an honest loss rate, so none is quoted, and the gap is not a zero. One coding limit matters: home-based family providers are indistinguishable from centers, and the same industry code also covers in-home care, so some small loans may belong to a home-based provider and not a center with a classroom building.

Enrolment, staffing and tuition in a Nebraska center file

The central question is enrolment: births and young children in the catchment, the share of parents who work outside the home, and the licensed capacity already operating nearby. Staffing is the second test, because ratios set by licensing rules determine how many teachers each classroom needs, and wages are the largest cost. A study should show tuition against what local families pay, subsidy reliance if any, and the weeks of ramp-up before a new center fills. For a loan this small, working capital to cover the opening months deserves a line of its own. Should the center buy its building, expect the appraiser to ask how readily classrooms convert to another use.