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Financing for childcare centres

Fees are steady, ratios are fixed, and growth means space. Almost every childcare file is about the room or the people in it.

How the money reads

An underwriter reads six months of statements. This is what yours usually says.

  • Parent fees arrive monthly; subsidy payments arrive on their own schedule.
  • Enrolment is near capacity or it is not, and the account shows which.
  • September is a step change. August rarely is.
A month, roughlyTiming only — no amounts
Fees and subsidyStaff and lease

Fees arrive at the start of the month and subsidy arrives on its own schedule. Wages are the biggest line and they are fixed by ratio, so the room to move is small in both directions.

The thing that slows these files down

Subsidy and parent fees often land from different sources. Send everything: a file missing the subsidy side looks like a centre at half occupancy.

Teacher engaging with children in a classroom setting, fostering learning and creativity.

What it usually pays for

  • A build-out, a playground, a second room
  • Hiring ahead of an enrolment you can already see
  • Bridging the gap while subsidy payments catch up

What an underwriter asks

The same four things decide every file: revenue and how long you have been making it, the cash cushion, bounced payments, and what you already pay other lenders. Here is what those look like in this trade.

Where does the subsidy land?
Parent fees and subsidy often arrive from different sources, sometimes into different accounts. A file missing the subsidy side reads as a centre running at half occupancy.
How full is the centre?
Enrolment is near capacity or it is not, and the account shows which. Ratios cap the revenue a room can produce, so a lender is reading occupancy as much as growth.
What does September do?
Enrolment steps up in September rather than drifting. Six months ending in August miss it entirely, which is worth a line if that is the window you are sending.
Six months of statements, read
  1. 1Revenue, and how longThe monthly average, and the years behind it
  2. 2The cash cushionAverage daily balance, against a month of revenue
  3. 3Bounced paymentsNSF and returned items over ninety days
4
What you already pay lenders

Totalled against monthly revenue and capped at 20% — the ceiling we pre-qualify to. This is the one that binds: two advances already running leaves less room than none, however good the rest looks.

already committedroom left
020% of monthly revenue

The split shown is an example, not your file. Yours is read by a person, from your own statements.

The whole method, on one page →

Asking for the right amount

A build-out or a new room has a cost — ask for it. Hiring ahead of enrolment is a number of months of wages, and describing it that way prices better than a round figure.

Across every trade the anchor is the same: roughly a month of revenue, and never more than the statements support. What you already pay other lenders matters as much as what you are asking for, and you need an average of at least $20,000 a month to qualify at all.

When to ask

Spring, for a September you can already see. Hiring and space both have lead times far longer than the paperwork does — most decisions come back within one business day of us having everything.

Have these ready as well

On top of the standard file — six months of statements, your incorporation documents, your CRA business number and photo ID.

  • Your provincial childcare licence and current capacity
  • Statements for every account, including the one subsidy is paid into
  • The lease, for a build-out or a second site
  • Criminal record checks and insurance certificates where the province requires them on file
The standard file, in detail →What your province calls its incorporation papers →

What usually fits

In this order, more often than not — though the file decides, not the trade.

Term loans

A fixed amount, a fixed schedule, and nothing pledged against it. The straightest answer when you know the number and the timeline.

$5,000 – $2,000,000

Revenue-based line of credit

Draw what you need, pay for what you draw, and the limit moves with your revenue. For months that are uneven, not short.

Up to $500,000

Equipment financing

The oven, the van, the line. Financed against the thing itself, so the payment sits against what the thing earns.

$10,000 – $1,000,000

See what you qualify forAbout ten minutes · no hard credit pull

Where these files get harder

None of these is an automatic no. They are the things that turn a one-day decision into a conversation, and all of them are better said by you than found by an underwriter.

  • A waitlist you cannot show, because it is not in the bank
  • Subsidy paid into an account left out of the file
  • Occupancy well below licensed capacity with nothing said about why
The funding step of a Spark application: an amount entered, and a one-line box saying what the money is for.

Any of these is one sentence in the box that asks what the money is for.

Said on the way in it costs you nothing. Found in the statements by somebody who then has to ask, it costs a day.

Questions

Yes, exactly like parent fees. It has to be in the statements you send, which means sending every account it touches.

Still deciding? Talk to a specialist — no application required.

Worth reading next

Other trades

See what you qualify for.

About ten minutes, most of it finding your statements. Applying never touches your credit score.

Takes about ten minutes, and applying never touches your credit score.