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

Large loans, no charge-offs on record

Washington child care centers borrow at a median of $568,600 under SBA 7(a), 1.47x when held beside every other state's 7(a) child care loans, the distinctive measure here; half the loans fall between $248,000 and $1.3 million. The program approved 181 loans from FY2017 to FY2026, worth $192.8 million, ranking Washington 15 among states, with child care at 10 of 39 among Washington asset classes. Franchise brands took 15.5%. In the funded cohort of 70 loans the charge-off figures are 0.00% to date and 0.00% inside five years, floors that loans still open could raise.

Cancellation and recent volume

The charged-off record is spotless but cancellation is not: at least 13.3% of approvals through FY2024 were cancelled, and 15.6% when undisbursed loans are counted. Volume was 21 loans in FY2017, 11 in FY2020, 18 in FY2024, then 28 loans and $39.6 million in FY2025 and 25 loans and $34.1 million so far in FY2026. The latest two years carry the largest dollar totals in the series, but they are too recent to have any outcome history.

Lenders and the Puget Sound concentration

U.S. Bank, National Association has 19 loans worth $12.6 million, Enterprise Bank & Trust and Columbia Bank 14 each, worth $15.2 million and $3.5 million, Live Oak Banking Company 13 loans worth $38.0 million, and KeyBank National Association 12. SBA lists the present holder and nothing more. King County has 95 loans, far ahead of Pierce with 20, Snohomish with 16, Spokane with 11 and Clark with 9. Home-based child care sits inside the same code, which means family homes are counted alongside centers and cannot be removed from the totals.

Testing a Washington child care plan

Licensing comes first: capacity per room, staff-to-child ratios and the time the state takes to license a new facility set the earliest date revenue can start. The study should test enrolment demand against existing centers, tuition against family incomes against family incomes, subsidy participation, and the teacher pipeline. Construction or conversion cost, fire and safety work and outdoor play space must be priced against a loan whose median is above half a million dollars. Debt service must be covered with the rooms only partly filled, and the appraiser will treat the center as a building with few alternative uses.