SBA 7(a) Child Care Center Feasibility Study in South Carolina

Loans well above the national norm

South Carolina child care centers borrow at a scale well above the national pattern: the median loan of $621,850 is 1.61x of the nationwide figure for the class, a ratio that makes this cell distinctive. The 100 approvals from FY2017 to FY2026 total $114.5 million, and half of all loans fall between $340,000 and $1.2 million. South Carolina places 22 among states; its own list puts child care at 7 of 39. A third of loans, 33.0%, carry a franchise flag.

Where the loans are held

TD Bank, National Association holds the most loans, 13, but for only $4.4 million. Pinnacle Bank holds 12 loans worth $20.2 million, an average ticket several times larger. United Community Bank has 8 loans and $12.7 million, SouthState Bank, National Association 6 and $6.2 million, and First Bank 5 and $7.8 million. The entries come from SBA's holder file and characterise the book alone. Greenville County has 23 loans, York 19, Charleston 14, and Lancaster 7, with Berkeley, Horry and Richland at 6 each.

Outcomes so far

The early funded cohort of 44 loans shows 0.00% charged off, both to date and inside five years, which is a floor and not a forecast. Cancellation hit an 11.9% floor among approvals dated FY2017 to FY2024; the harsher ceiling, which adds loans never paid out, is 13.1%.

A study for a South Carolina child care loan

Larger loans mean larger projects, and a study should say whether the money builds a new center, converts a building or buys an existing operation. Demand work must count young children in the trade area, the tuition local families pay, and competing centers' capacity and waiting lists. Staffing ratios and wage levels dominate operating cost, and the pro forma should show enrolment reaching a stabilised level along a realistic timeline with a slower case alongside. For a larger-than-typical request the cost per licensed space should be benchmarked, and the appraisal of any real estate must support what the loan assumes. Franchise obligations, where relevant, belong in the margins, and with a third of loans franchised the study should state plainly whether the proposed center is one. Start-up losses before enrolment fills also need funding, so the budget should include operating reserves that carry the center to break-even.

A data caution: SBA's category does not distinguish a family child care home from a center, since in-home care shares the code, so these totals blend the two.