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Owner & Director

Everything You Need to Know About Financing Your Child Care Business

April 21, 2021

The Childcare industry is one of the fastest growing markets worldwide despite the pandemic, with a global market value of $339.1 Billion in 2018 and projected growth of up to 11%/year over the next decade. This growth is projected to continue due to further increases in two working parent families, appreciation of benefits of early learning, and ever increasing government subsidies in the industry. 

All of these things make child care and daycare a great option for those looking to start a business or grow their childcare brand. But even if you have the passion, creativity, location, if you don’t have money to get the center off the ground your business will fail before it opens its doors. 

As you begin to create a business plan for your center, keep in mind that lenders are likely to see child care as a favourable investment for the reasons mentioned above, so there’s no need to save up for all costs before you begin. Here are a few places to look for funding to start your new business or grow your childcare brand today.

Grants and Forgivable Loans

Often governments and other organizations offer grants for early learning centers. This can be a great way to fund your startup cost and offset your yearly costs as well. To apply for a grant usually you are required to follow a set of guidelines for your programming. A quick internet search will turn up available grants in your area.

Commercial Banks

Obtaining a business loan is also an option for startup costs. The ability to get a commercial loan will depend on many factors such as your credit score, available cash, and how much you need to borrow. Bank financing has many perks such as the reliability of the access to your loan and the freedom to do what you’d like with your center. To learn more just call or walk into your local bank or credit union and set up an appointment with a small business advisor.

Private Financing

Depending on your network, finding private funding can be a great option as well. The benefits could include avoiding bank credit approval or required programming, or even securing lower interest rates. If you plan to use private financing though, have a lawyer write up a formal agreement to be signed by both parties to eliminate any misunderstandings and protect both your business and your relationships. 



Another option to consider when planning your startup financing is franchising. There are many options for franchising in child care depending on your location. The benefit of franchising is that much of the work is done for you. Franchising fees will include things like a business plan, order lists, training and support for franchisees, and brand recognition. Some may even help you find a good location and build your center from the ground up. 

Depending on how much experience you have this may be a great, lower risk option as franchising fees may save you from business mistakes or administrative headaches, running inefficiently, or trying to build a brand from scratch. 

If you would like to consider Franchising I recommend researching the following; Goddard school, kiddie academy, primrose, light bridge, and discovery point. There are plenty of other franchise options available too and your choice will likely depend on your experience and  location as well as the cost, benefits, and philosophy of each franchise. 

Final Notes

As you consider which financing option is the best route for you, think about your goals and your center’s mission. Are you willing to tailor your programs to quality for a grant?  Can you get a Bank loan for a reasonable rate? Are you comfortable starting your own business or is franchising worth the cost? Each of these options will work better for some centers than others, and their suitability might be based on your experience, capital, credit rating, network or all of the above. Take some time, ask around, and do your research. 

This is a big decision and you will want to secure your startup budget from the right lender. That said, business is all about timing so secure financing today and get your piece of the $339 billion childcare market while discovering your purpose working in a rewarding industry where you can give back to your community for years to come!

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