Licensed daycare centers, preschools, and after-school programs qualify for MCA based on monthly revenue: typically 75%-125% of average monthly deposits. Tuition, state subsidy payments (CCAP, TANF childcare), and fee income all count. Businesses need 6+ months of operation, $10,000+/month in deposits, and a 500+ personal credit score. Funding arrives once the provider approves your file, with no collateral required.
Why Childcare Businesses Are Strong MCA Candidates
Childcare centers have deposit patterns that MCA underwriters find favorable. Revenue is primarily tuition-based: predictable, monthly, and low churn. Unlike restaurants or retail, childcare revenue doesn't fluctuate wildly week to week. Parents rarely pull children mid-month. This makes bank statement analysis straightforward: consistent deposits, reliable average balances.
Childcare centers also have high operating leverage: the primary cost is labor (staff wages), which scales with enrollment but doesn't spike unpredictably. The gap between subsidy reimbursement cycles and payroll obligations is a common and legitimate cash flow challenge: exactly the scenario MCA is designed to bridge.
Funding Amounts by Center Size
| Center Profile | Monthly Revenue | Typical MCA Range | Estimated Holdback |
|---|---|---|---|
| Home daycare (6-12 children) | $10K-$18K | $7K-$22K | $250-$550/day |
| Small center (20-35 children) | $20K-$45K | $15K-$55K | $500-$1,350/day |
| Mid-size center (40-80 children) | $50K-$90K | $37K-$112K | $1,100-$2,700/day |
| Large center / multi-site (100+) | $100K-$250K+ | $75K-$312K+ | $2,250-$9,400/day |
Estimates based on 75%-125% advance on average monthly revenue; holdback assumes 10% of daily deposits. Actual amounts and rates depend on full underwriting review.
Qualification Requirements
- Time in business: 6+ months of active licensed operation
- Monthly revenue: $10,000+ in average monthly bank deposits
- Credit score: 500+ personal FICO (owner/operator)
- Bank account: Active business checking account; 6 months of statements required
- Licensing: Active state childcare license in good standing
- No open bankruptcy: Discharged prior BK acceptable; open BK is a decline
Note on home daycares: Home-based licensed daycares operating as sole proprietorships sometimes run tuition through personal accounts. For MCA, you'll need a dedicated business checking account showing the childcare income. If you've been commingling, open a business account and document transfers for 3 months before applying.
How Childcare Centers Use MCA Funding
What Revenue Counts for MCA Underwriting
| Revenue Type | Counts for MCA | Notes |
|---|---|---|
| Private tuition (ACH/check/card) | Yes | Must deposit to business account |
| State childcare subsidy (CCAP, TANF) | Yes | ACH deposits from state agency count |
| Head Start / Early Head Start co-payments | Yes | Document the agency as deposit source |
| Food program reimbursements (CACFP) | Yes | Treated as revenue if deposited to account |
| After-school program fees | Yes | Same account required |
| Grant disbursements (one-time) | Sometimes | Underwriter may exclude non-recurring grants |
| Owner capital injections | No | Excluded from revenue calculation |
How to Apply
Complete the application
Business name, EIN, owner name, estimated monthly revenue, funding amount needed. Takes about 10 minutes.
Upload bank statements
6 consecutive months of complete business bank statements as PDFs. All accounts receiving childcare income should be included.
Receive your offer
Underwriting review takes 2-4 hours. You receive a specific offer: advance amount, factor rate, holdback percentage.
Sign and fund
E-sign the merchant agreement and provide a voided business check for the deposit account. These are approval-stage items, not part of what you send to apply. ACH funding on the provider’s own timeline after review.
Ready to Apply for Childcare Business Funding?
Review begins as soon as your file is complete. Funding timing is set by the funding provider after review. State subsidy payments count as revenue.
Start ApplicationFAQ
- Can a licensed daycare get a merchant cash advance?
- Yes. Licensed daycares with at least 6 months in business and $10,000+ in average monthly revenue qualify for MCA. Childcare centers often qualify at above-average advance multiples because revenue is predictable (monthly tuition) and low churn compared to retail. Funding ranges from $10K to $500K depending on monthly revenue and qualification profile.
- Does childcare subsidy funding count as revenue for MCA?
- Yes. State childcare subsidy payments (CCAP, TANF-funded childcare, Head Start co-payments) that deposit directly into your business bank account count as qualifying revenue. The key is consistent, documented ACH deposits from the state agency. These are treated the same as direct tuition payments.
- What documents do childcare businesses need to apply?
- To apply you send two things: the signed application and 6 consecutive months of business bank statements. That is the whole initial list. Owner ID and a voided business check are not part of it, and are requested after approval. Some providers may also request your childcare license. Tax returns are typically not required for MCA. The entire process is document-light compared to bank loans or SBA applications.
- What can childcare businesses use MCA funds for?
- MCA funds are unrestricted: childcare centers use them for staff payroll, facility renovations, playground equipment, safety systems, classroom materials, curriculum licenses, marketing campaigns, and licensing fees. There is no lender oversight or approval required on how you use the funds once deposited.
- How much can a daycare borrow?
- Typically 75%-125% of average monthly revenue. A center with $40,000/month in tuition deposits can typically access $30,000-$50,000. Centers with $100,000+ monthly revenue can access $75,000-$150,000+. The exact amount depends on your specific financial profile including average daily balance, NSF history, and existing debt positions.