Daycare Center Loans

Structuring a daycare center loan typically has a few challenges, including the special use nature of the property, and borrower/management experience. Due to these concerns and others, many lenders simply shy away from this building type/commercial real estate loan. However, borrowers do have multiple options for their daycare center loan.

Loans for Daycare Centers

Conventional financing for daycare centers typically consist of a 5 year fixed rate with 20 amortization schedules. Loan to values on purchases hover at approximately 65% and 60% on refinances. Most conventional sources are very conservative with daycares and want to see 2 years of tax returns that show a debt coverage ratios of 1.3 to 1.4 compared to an a 1.2 for most building types. Management will be heavily scrutinized with an emphasis on the borrowers experience in handling business matter beyond the care of children.

SBA loans for Daycare Centers

SBA loans can be one of the better ways to finance daycare centers. First of all, borrowers can put down as little as 15% (85% loan to value) on purchases, compared to conventional financing at around 40% down. Debt coverage ratios are less convervative as well, and can go down to 1.1. Future business projection can be used as well to improve historical financial's.

Many owners are unaware that they can use SBA loans to refinance their Daycare Center. Loan to values can go as high as 85% when the SBA program is included. Fixed rates on the SBA 7a loan are 5 years with amortization schedules of 25 years. 504 programs boasts rates fixed for as long as 10 years.
Whether you're considering purchasing or refinancing a daycare we have the expertise and experience you need to secure the best financing. As commercial mortgage brokers we have the contacts you need. Get approved on your daycare center loan now or cal 248 885 8797.

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Commercial Finance Advisors, Inc.
(248) 885-8797 Phone
(866) 337-3141 Fax
http://www.cfa-commercial.com/
261 E Maple Rd
Suite 13
Birmingham, Michigan 48009