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Minimum 6 months operating the childcare center. Pre-school, daycare, home-based childcare, and after-school programs all qualify. The childcare license is not required for MCA: only bank statements.
Yes. Childcare centers and daycares qualify for MCA based on average monthly bank deposits. A center averaging $15,000-$25,000/month in tuition and subsidy deposits can typically qualify for $15,000-$37,000. The enrollment-based revenue model is well-understood by MCA underwriters.
Industry Authority Center
Subsidy checks arrive late. Summer enrollment drops. Licensing renewals come due before the next tuition cycle. Childcare operators face cash flow gaps that don't follow a convenient schedule: this resource center was built for the realities of running a childcare business.
Most childcare funding needs fall into one of five situations.
Common uses across center-based daycares, preschools, before/after school programs, and home-based childcare businesses.
Government childcare subsidies (CCAP, state voucher programs, Head Start co-pays) can lag 30-60 days behind services rendered. MCA bridges the gap so payroll, rent, and utilities are covered while the state processes reimbursements.
State child-to-staff ratios require minimum staffing even when enrollment drops in summer. You can't reduce staff below compliance minimums, but tuition revenue drops 20-40% in June/July/August. MCA funds the gap.
Annual licensing renewals, health inspector remediation, fire inspection upgrades, background check fees for new staff, CPR certification, and ADA accessibility improvements are mandatory and time-sensitive. MCA funds compliance before the deadline.
When you have a wait-list but need to hire to open new classroom capacity, payroll starts before the new children's tuition starts. MCA funds the 4-8 week gap between hiring and when new enrollment revenue fills in.
Playground equipment replacement (ASTM-certified fall surfaces, age-appropriate structures), classroom furniture, nap mats, educational materials, and fencing upgrades all require upfront capital before the state signs off.
Opening a second childcare location requires licensing fees for the new facility, renovation, equipment, and staff hiring before a single child enrolls. MCA at the first location can fund the second location's pre-opening costs.
Understanding your enrollment cycle is the first step to planning capital needs around it.
The childcare funding strategy: Apply in August-September (back-to-school peak) or January-February when your 6-month statement lookback captures your strongest enrollment months. Use the advance to pre-fund the summer gap or cover licensing costs before they become compliance emergencies. Start your application →
What underwriters look for when evaluating a childcare center's application.
Minimum 6 months operating the childcare center. Pre-school, daycare, home-based childcare, and after-school programs all qualify. The childcare license is not required for MCA: only bank statements.
500 FICO minimum for the business owner. Underwriters look primarily at deposit volume and consistency: a 520 credit score with $20,000/month in consistent deposits can qualify for a competitive offer.
Minimum $4,000-$6,000+ in average monthly deposits (private tuition + subsidy payments combined). Apply after your best enrollment months, September or January, for the strongest possible offer.
6 consecutive months of business bank statements, all pages. If you maintain separate accounts for tuition and subsidy payments, include both. A dedicated business bank account is required: personal accounts don't qualify.
0-2 NSFs per month is acceptable. Childcare centers that receive large subsidy batches sometimes show temporary lows between reimbursement cycles: underwriters familiar with the industry understand this pattern.
LLC or corporation required. Sole proprietors using personal accounts typically do not qualify. If you operate as a sole prop, forming an LLC and opening a dedicated business account is the first step toward qualifying.
How underwriters evaluate childcare center applications: the factors that matter most.
Subsidy payment deposits that appear as lump-sum monthly transfers may look like low-deposit months to automated screening. When you apply, note that subsidy payments are batched: underwriters experienced with childcare accounts understand this pattern.
Three options available to childcare operators: what each one is actually built for.
| Factor | MCA | SBA 7(a) Loan | CDFI / Nonprofit Lender |
|---|---|---|---|
| Time to Funding | Provider-Set | 60-180 days | 30-90 days |
| Min Credit Score | 500 FICO | 680+ FICO | Varies (often 580+) |
| Collateral | None required | Yes (personal + business) | Sometimes |
| Paperwork | 1-page app + 3 bank stmts | Extensive (tax returns, P&L, business plan) | Moderate + mission statement |
| Cost | Higher (1.15-1.45 factor) | Low (prime + 2-3%) | Low to moderate |
| Geographic Limits | No: all 50 states | No | Yes: local/regional only |
| Best For | Payroll gaps, subsidy delays, licensing fees, facility fixes in <3 days | Long-term expansion, new building, low-rate capital | Centers serving low-income communities with flexible criteria |
Answers to common questions from childcare center operators about MCA, subsidy gaps, CDFI loans, and the application process.
Yes. Childcare centers and daycares qualify for MCA based on average monthly bank deposits. A center averaging $15,000-$25,000/month in tuition and subsidy deposits can typically qualify for $15,000-$37,000. The enrollment-based revenue model is well-understood by MCA underwriters.
Childcare subsidy payments (CCAP, Child Care Subsidy, state voucher programs) count as business income and appear on bank statements. MCA underwriters evaluate total deposits including subsidy payments. The main consideration is timing: subsidy reimbursements are sometimes delayed 30-60 days, which creates cash flow gaps that MCA bridges.
Apply in August-September (back-to-school peak) or January-February (new year enrollment wave) when your 6-month statement lookback captures your strongest enrollment months. Avoid applying in June-July when summer enrollment has dropped your 6-month average. Your deposit average directly determines your advance amount and factor rate.
Childcare centers typically access $15,000 to $150,000 depending on average monthly deposits. The general offer is 75-150% of your 6-month average deposit volume. A center averaging $25,000/month in combined deposits can typically qualify for $18,750-$37,500.
Yes. Hiring qualified staff to meet state-mandated child-to-staff ratios is one of the most common uses. Background checks, CPR/first aid certifications, onboarding training, and payroll for new hires before enrollment fills to capacity all require upfront capital that MCA can provide on a provider-set timeline.
Yes. State childcare licensing fees, annual renewal costs, fire inspection remediation, facility upgrades required by health inspectors, and ADA compliance improvements are all eligible. These costs are mandatory and non-deferrable: MCA provides capital to meet compliance deadlines without disrupting operations.
MCA repayment is typically structured as a fixed daily or weekly ACH withdrawal based on your average revenue, not a percentage of each transaction. Summer enrollment dips don't automatically reduce your payment amount, which is why applying for the right advance size matters. A repayment-to-revenue ratio under 15% of average monthly deposits is generally sustainable.
Yes. CDFIs sometimes offer childcare-specific programs at below-market rates, particularly for centers serving low-income communities or receiving CCAP subsidies. However, CDFI approvals take 30-90 days and have strict geographic and income restrictions. MCA fills the gap on a timeline set by the funding provider after review.
Home-based daycare businesses can qualify if they operate as a formal business entity (LLC or corporation), maintain a dedicated business bank account, and average at least $4,000-$6,000/month in deposits. Sole proprietors using a personal account typically do not qualify.
Required: completed one-page application, 6 consecutive months of business bank statements (all pages, all accounts where tuition and subsidy payments are deposited), and a voided business check. No licensing documents, enrollment records, or state reports are required for MCA.
Yes. Expanding to a second location requires capital for lease deposits, renovation, equipment, licensing fees for the new facility, and staff hiring before the first child enrolls. MCA at the first location can fund the second location's pre-opening costs while the first location's revenue repays the advance.
The minimum credit score is 500 FICO. MCA underwriters evaluate childcare centers primarily on deposit volume and consistency, not personal credit. A center with consistent monthly tuition deposits can offset a below-average credit score.
Most childcare centers receive an approval decision after submitting 6 consecutive months of bank statements. Funding timing after that is set by the funding provider, which matters when facing payroll deadlines or licensing renewal fees, so submit a complete file as early as possible.
SBA 7(a) loans offer lower rates but require 60-180 days for approval, 680+ credit score, collateral, and extensive documentation. MCA closes once the provider approves your file, requires only 6 consecutive months of bank statements, accepts 500 FICO, and needs no collateral. SBA is best for large planned expansions. MCA is best for needs on a faster provider-set timeline: payroll, licensing fees, enrollment-cycle gaps, and facility upgrades.
Yes. Childcare centers with at least 6 months in operation and $4,000-$6,000+ in average monthly deposits can qualify. The childcare industry's essential-services nature and recurring tuition model are viewed favorably by underwriters.
One-page application. 6 consecutive months of bank statements. Review begins as soon as your file is complete.
500 FICO OK · No collateral · Subsidy income counts · No licensing docs required
Or call/text: 330-238-3003
T.A.G. Business Funding
500 FICO minimum. Subsidy income counts. No licensing docs required. Funding timing is set by the funding provider after review.
500 FICO minimum · $4K-$6K+/month revenue · Funding timing is set by the funding provider after review
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