Yes. A child care center can finance a second location with a term loan, vans and playground equipment on equipment terms, and the staffing weeks before enrollment fills with working capital. Partners read the first center's results. The 2023 County Business Patterns counted 43 child day care employers across Scott County, MN.
The direct answer, county figures, licensing and furniture costs, a worked second-site budget with invented figures, payroll in the funding file, and a director's checklist.
The Short Answer: Yes, With Each Cost Matched to Its Own Funding Type
A second center is several purchases at once. The space itself, leased or bought, and its build-out fit a term loan. Vans, playground structures, cribs, cots and kitchen equipment fit equipment financing. The staff hired before the rooms fill fit working capital. Matching each cost to its own funding type keeps each payment in line with how long the purchase lasts.
Scott County, MN had 43 child day care employer establishments in 2023, with 603 paid employees and an annual payroll of about $17 million; only 14 of the 43 had fewer than five employees (Census County Business Patterns). Staffing is the largest cost, which is why the payroll plan sits at the center of a second-site request.
A partner reading the request looks hardest at the first center: years open, enrollment history, waitlist, results and how the director manages staffing.
Childcare Business Loans and Licensing Upgrades: Notes for Shakopee, MN Child Care Centers
Licensing upgrades often come before a second site: a center adds an infant room, changes its age groups or increases its licensed capacity. Each change can bring costs for equipment, room changes and staff. Childcare business loans for those upgrades are usually small equipment loans or term loans sized to the work.
Licensing requirements belong to the licensing agency; ask it directly what a change requires before budgeting it. A partner may ask for the agency's approval or the updated license as part of the request.
In Shakopee, room changes that involve construction go through the city's building permit process; the zoning and permits guide covers it.
Working Capital for Daycares: Nap Cots and Outdoor Play Areas
Nap cots, cribs, tables and outdoor play areas are the everyday equipment of a center. Working capital for daycares is not usually the right fit for them; they are long-lived and fit equipment terms. Working capital fits the costs that end: staffing a new room before families enroll, or covering payroll while subsidy payments are delayed.
An outdoor play area is a project with several parts: surfacing, fencing and play structures. Play structures can go on equipment terms, while surfacing and fencing may be grouped with the build-out.
Child Care Facility Loan: Classroom Furniture and Classroom Expansion
Illustration only, invented figures: a center plans a second site with a $180,000 build-out of leased space, $42,000 of classroom furniture and play equipment, and a $58,000 passenger van. It hires 5 staff at $980 a week each, 10 weeks before enrollment covers payroll. The staffing ramp comes to $49,000 before employer taxes (our arithmetic).
That gives four requests: a term loan for the $180,000 build-out, equipment financing for the $42,000 of furniture and equipment and the $58,000 van, and working capital for the $49,000 ramp. The total, $329,000, is our sum; each piece has its own term.
Real budgets vary. Use the center's own quotes and wages, and add a contingency for a later opening date.
Payroll: Where It Shows Up in a Child Care Center's Funding File
Payroll shows up in a center's funding file as payroll reports, the staffing plan for each room, and the enrollment that pays for it. A partner reading the file compares the payroll calendar with tuition and subsidy income by month and looks for the weeks where payroll leads.
Subsidy timing matters. If a share of tuition comes through a subsidy program, records of how long those payments take to arrive show a partner how large the gap gets.
A line of credit sized to that gap, drawn when payroll leads and paid down when payments arrive, is a common answer.
A Second-Site Checklist for a Center Director
Before calling about a second site, a director can gather:
- Enrollment by month for the first center for two or three years
- The waitlist, if there is one
- The proposed lease or purchase terms for the new space
- The contractor's bid and equipment quotes
- The staffing plan and wages for the new site
- Tuition and subsidy income records
Call (612) 608-4508 to talk it through. See daycare center financing and the Shakopee, MN page for more.
By Wheatvale Lenders · Updated
