The daycare industry has seen immense growth over the years. According to the Bureau of Labor Statistics, there are more than 1.2 million childcare workers in the US alone. This number is expected to grow by 7% in the coming years. So if you’ve been thinking of getting into the daycare business, or expanding your daycare center, now is the best time. However, just like any other business, a daycare center needs adequate financial backing. You have to meet licensing and insurance costs, and pay utility bills. You need to spend for diapers, cleaning supplies, safe toys, mats, blankets, sleeping bags, etc. No doubt the revenue from your daycare center may cover some of these costs. But the business will need financial boost from time to time. Which is why, you should consider a loan for business expansion.
How to get a loan for business for your daycare center?
Here are some of the sources of finance available for daycare centers.
- Commercial Banks. Most traditional lenders and banks offer short-term and long-term loans for business at fixed interest rates. But these lenders typically look for collateral as well as good credit to fund your daycare center. They also consider your business plan and revenue to determine the risk involved in financing your business.
- Government Loan Programs. Your business may be eligible for special financing from federal, state or local government agencies. This type of financing is funded by the government and administered under government guidelines. Just like bank loans, these loans also require collateral. And to qualify for these loans, your business should also meet other eligibility criteria such as minimum revenue and time in operation.
- Personal Loan for Business. If your daycare center does not qualify for business loans from traditional lenders, you can avail a personal loan for business. Unlike small business loans, these loans don’t consider your business revenue and credit. They take your personal income and credit history into consideration. Therefore even start-up businesses that have been denied a business loan can benefit from this type of loan. Moreover, a personal loan for business offers great flexibility. You can use the funds from this loan for any purpose. It is also much easier to avail owing to simpler requirements.
Whichever loan you choose, make sure you’re equipped with an impressive business proposal. This proposal should clearly state your goals and plan for the daycare center. Also provide a sound financial management plan. Give a comprehensive budget with a detailed cost evaluation. It may seem like a daunting task to find the right source of finance for your daycare center. But the end results make it completely worthwhile!