SBA 7(a) Child Care Center Feasibility Study in New York

New York child care: small loans, scattered boroughs

New York's child care centres borrow modestly under 7(a). The median loan is $125,000, only 0.32x what such centres borrow at the median in other states, and the central spread runs from $42,250 to $410,500. The file for FY2017 to FY2026 holds 436 loans worth $198.2 million, placing the state fifth by count, with child care in eighth place among New York's 39 classes. Franchise share is 10.3%. The modest ticket tells us loans here finance small centres, and a plan should be sized to that.

Counties and the years

Kings County leads with 80 loans, then the Bronx with 48, Queens with 44, Nassau with 36, Suffolk with 35, Westchester with 31 and Monroe and New York with 30 each. Erie has 18 and Orange 11. The record therefore runs across the city, Long Island, Westchester and the Rochester and Buffalo areas. Approvals dropped to 18 in FY2021 and have since climbed to 66 in FY2025 and 61 in FY2026.

Lenders

TD Bank, National Association holds 78 of the loans, worth $19.2 million. Manufacturers and Traders Trust Company follows at 35 loans ($2.3 million), then JPMorgan Chase Bank, National Association at 33 ($6.4 million). ESL FCU and Northeast Bank have 21 loans each, worth $6.5 million and $2.6 million. SBA's table follows the books of these institutions and says nothing about their practices.

A noticeable gap between two loss measures

Cancellation among FY2017 to FY2024 approvals begins at 12.3% and rises to 13.3% counting undisbursed loans as cancelled. In the cohort of 158 loans disbursed in FY2017 to FY2021, 7.6% are charged off to date, while only 0.63% were gone within five years of approval. The wide gap shows that most losses came after the fifth year, and both measures are floors. A lender should look past early performance when judging a centre.

Coding

Family child care homes cannot be told from centres in this data, because in-home providers sit in the same industry code. In a city of small apartments and licensed home providers, some of the 436 loans may have financed a home-based business.

What a New York centre study has to test

Demand is block by block. The study should count children by age within walking or transit range, the room left in nearby programs, their waitlists and the tuition parents can afford next to subsidy programs. Licensing in New York is detailed, and the timetable for approval and the cost of meeting space, fire and safety rules must be in the budget. Staffing ratios drive payroll, and recruiting qualified teachers is a constraint. Set the budget against a median near $125,000. Repayment must hold at partial enrolment, and the lease must run beyond the loan.