How Do You Finance a Daycare Center? (List of Financing Agencies Included)

BizFluent reports that it takes about $10,000 to $50,000 or more in startup costs for a daycare business to get off the ground. Hence, learning about financing agencies is critical for getting your daycare started sooner rather than later. 

You can finance a daycare via:

    • SBA loans.

    • SBA grants.

    • Commercial bank loans.

    • Other grant programs.

    • Crowdfunding.

    • Donations. 

    • Your personal savings account.

Get creative with how you finance your daycare center. If you cannot secure enough loans or grants for financing, hold different fundraisers that will benefit your daycare monetarily in the long run.

SBA Loans

Apply for a Small Business Administration (SBA) loan to be able to:

  • Build and/or fund opening a new daycare center. 
  • Purchase an existing daycare business under your ownership.
  • Purchase equipment and supplies for your daycare center. 
  • Refinance any daycare debt into a consolidated payment.

The SBA Express loan is one of the quickest avenues for securing financing for your daycare. Once you put in your application, you will get an approval or denial within 36 hours of submission. Once approved, your funds will show up in the account provided within 90 days after application submission.

Considering the SBA supports more small businesses in getting off the ground, an SBA Express Loan is sometimes easier to secure with a faster turnaround time than a commercial bank loan. 

Especially if your credit is not as high as other applicants, it would be best to start with an SBA Express Loan to get your business off the ground faster and prove to creditors that you can repay your debts. Once you have successfully paid back an SBA Express Loan, it will make it easier for you to apply for commercial bank loans in the future if you need one. 

SBA Grants

The Small Business Administration also offers grant options. Go to to the grants section, fill out an application, and you will be matched with the best grants that fit your profile.

Commercial Bank Loans

If you have had a good relationship with your bank since you opened your bank account, chances are that you may be approved for a commercial bank loan. This will How Do You Finance a Daycare Center? (List of Financing Agencies Included)depend on your assets and credit score as to whether you will be approved for a bank loan or not. 

When preparing to ask for a loan from a bank, be sure that you have a PowerPoint presentation ready highlighting the key points of your business plan. Bring paper copies of your business plan as well copies of your business card. 

Dress to impress for the presentation. Dress business casual to show that you are serious about securing, using, and paying off that bank loan responsibly. You not only have to look responsible, but everything in your presentation must speak to your ability to properly handle a commercial bank loan for your daycare business. 

Other Grant Programs

USA Grants Application

The USA Grants Application offers you a broader resource for securing grants to fund your daycare center. Simply fill out this registration form and you will hear back from the grantors with the options in which you may qualify. 

When you fill out the application, be sure to select the reason as business funding because you want to use this grant as startup capital for your daycare business. 

Be sure that you know:

    • If your credit score is excellent, good, fair, or poor. This status will be shown on a credit reporting website of your choosing. 
    • How much money you will need from the grant. 
    • Unique niches that distinguish your daycare that separate you from other applicants asking for business funding. 
    • What personally separates you from other applicants personality-wise as to why you should receive the grant funding. 

Crowdfunding & Donations from Family, Friends, and Other Supporters


Crowdfunding allows whoever wants to support your business to donate to a monetary campaign. Use a crowdfunding website such as GoFundMe as the platform for gathering your funds. Be mindful that there is a small percentage transaction fee for each donation that is made to your campaign. This includes a 2.9% processing fee plus another 30 cents tapped on for each donation. 

When you create a GoFundMe page, you will be given a link to share your campaign. Post this link to your personal social media account, business social media account, and your daycare website. Ask friends and family and other supporters to share this campaign for you on their social media pages. In return, you could consider giving any parent who wants to enroll their child at your daycare a tuition coupon for $20 off their tuition bill for the current month. 


There are several ways that you can collect donations from family and friends to benefit your daycare business monetarily. 

    • Have a donation jar when at a community event. Set up an information table where you hand out tuition information, daycare applications, and sell daycare swag such as T-shirts and tote bags. Hand out refreshments and stationery for free as a courtesy. 
    • Ask for donations from family and friends as birthday or holiday presents over the next few years. They can write you a check to your business checking account or they can Venmo or Cashapp you the donation to your special account for said donations.
    • Give an incentive for those who want to donate to your business. Maybe a free tote bag, T-shirt, or tuition coupon. The choice is yours!
    • Host a kid’s activity day at the building in which you will be running your daycare. The entry fee could be a free-will donation if the people attending can give it. If hosted in the spring, the activity day could include:
      • A coloring/painting table.
      • Water table station.
      • Sand table station. 
      • Sports station with rotating sports activities throughout the event. 
      • Face painting table. 
      • Information table with enrollment and tuition information. 

How Do You Finance a Daycare Center? (List of Financing Agencies Included)

Learn more about government grants HERE.

Your Personal Savings Account

You can invest in your future daycare by putting aside more money in your savings account every month. This will only be beneficial to you if you can properly budget your monthly expenses. 

First, figure out your monthly income from all sources including jobs, dividends from stock, and residual income from any source. 

Calculate all your debts for the month including credit card and loan bills, home bills, subscription services, membership fees at gyms and other organizations, and the like.

Evaluate the leftover amount after you have paid all your debts for the month. Try to put away 50% of this amount into your personal savings account each month. 

Budgeting will also involve ridding of old spending habits that could be eating into your possible savings towards your daycare center. Cook more at home and eat out less to save money. If you find you are not using a subscription service as much as you used to, consider canceling it. 

Once you are ready to open your daycare center, consider transferring the bulk of your savings to your business checking account, so that you have the funds to use towards startup costs. 

14 Financing Agencies You Can Contact For Funding and/or Support

  1. National Funding
  2. Early Head Start Program
  3. Individuals with Education Disabilities Act (IDEA)
  4. Early Head Start-Child Care Partnership
  6. Preschool Development Grants
  7. The U.S. Department of Agriculture Child & Adult Care Food Program
  8. Child Care and Development Fund
  9. Military Child Care Fee Assistance
  10. Community Facilities Direct Loan & Grant Program 
  11. Donation of Federal Surplus Personal Property Program
  12. Child Care Resource and Referral (CCR&R) Agency
  13. Child Care and Development Block Grant Program (CCDBG)
  14. Child Care Aware Fee Assistance Program

Find out more information about financing agencies for your daycare center by visiting the Administration of Children and Families Federal and State Funding page. 

Small Business Chron discusses some grant resources for funding your daycare as well.

Related Questions

What is the best funding resource that I can utilize to fund my daycare center?

The best funding resource that you could utilize is a grant, donation, or crowdfunding. Donations and crowdfunding are from donors that want to support your business and do not have to be paid back. Grants also do not have to be paid back to grantors. 

While you may not be able to fully start your daycare with just these resources in which you do not have to pay back, do not feel bad if you have to take out a loan from the SBA or your local commercial bank. This could be a win-win in that you can build your credit in case you need a loan in the future for whatever reason. 

What if my crowdfunding campaign is not getting much support?

If your crowdfunding campaign is not getting much support, continue to promote it daily on:

  • Your social media page.
  • Your business social media page.
  • Friends’ and family’s social media pages who are willing to share it. 
  • Send out emails on your direct email list asking for support on the campaign. 
  • Newsletters you mail out to potential clients. 

How Do You Finance a Daycare Center? (List of Financing Agencies Included)

Please note: This blog post is for educational purposes only and does not constitute legal advice. Please consult a legal expert to address your specific needs.

To learn more on how to start your own daycare checkout my startup course and documents here.


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