Licensing sets your timeline, so plan funding around it
Smaller and nonprofit providers can use SBA microloans up to $50,000 [6]. In New Jersey, a child care center is one that cares for six or more children under 13 for less than 24 hours a day, and centers must be licensed by the Department of Children and Families [5]. Centers are licensed for three years at a time [5]. A family child care home cares for five or fewer children in the provider's own home and may choose to register voluntarily [5].
This matters for funding in two ways. First, a lender will want to see that the site can be licensed before money goes into it. Second, there is a gap between signing a lease and opening the doors. Ask each lender how payments work during that gap, for example whether they can start lower until you open, rather than assuming full payments begin on day one.
Licensing rules are as of Oct 20, 2026. Confirm current requirements with DCF before you sign a lease.
What New Jersey child care businesses borrow
Child care loans are big because centers are big projects. We counted SBA loans to New Jersey child care services businesses in the SBA's public loan file for fiscal 2024 through June 30, 2026 [1].
| Measure | Value |
|---|---|
| Loans | 115 |
| Total approved | $98.8 million |
| Middle (median) loan | $400,000 |
| 504 loans (real estate and major assets) | 10 |
| For a change of ownership | 16 |
| To startups or businesses 2 years old or less | 39 |
The middle child care loan, $400,000, is more than six times the middle beauty salon loan in the same file [1]. One in three loans went to a new or very young center [1], so a short track record does not rule you out. The Census counted 2,466 child care businesses in New Jersey in 2023, employing 41,650 people [2].
Which product fits which project
| Project | Usual fit | Key fact |
|---|---|---|
| Buildout, second site or buying a center | SBA 7(a) loan | Up to $5 million; changes of ownership allowed [3] |
| Buying the building | SBA 504 loan | Long-term, fixed rate; maximum $5.5 million [4] |
| Small project, or a nonprofit center | SBA microloan | Up to $50,000, open to certain nonprofit child care centers [6] |
| Payroll before tuition and subsidies arrive | Line of credit | Draw and repay as payments land |
| Playground, vans, kitchen | Equipment financing | The equipment secures it |
The microloan detail is easy to miss. The SBA microloan program is for small businesses and certain not-for-profit child care centers [6]. Most small business programs are for-profit only, so a nonprofit center should ask a microloan intermediary first.
New Jersey programs, and the home-based catch
The NJEDA Small Business Fund lends up to $500,000 to New Jersey small businesses in operation at least one full year with revenue of $3 million or less, and to nonprofits in operation at least three years [7]. But home-based businesses are ineligible [7]. That rules out most family child care homes.
People search for New Jersey child care grants every year. Grant programs open and close often, and many small business grants that were open in past years are now closed. Check the New Jersey page for what is open today before you plan around a grant.
Program details are as of Oct 20, 2026.
What to bring to a lender
- Your license, or for a new center, where you are in the licensing process and the site plan.
- Enrollment: current children by age group, your capacity, and the waitlist if you have one.
- Tuition rates and how families pay, plus the share of income from subsidies.
- Two years of tax returns and recent bank statements for an existing center.
- Contractor bids for any buildout, and the lease or purchase contract for the site.
For a purchase, add the seller's enrollment history and staff list. A lender buying into a center's future wants to know the teachers are staying.
The cash flow gap, and what to avoid
Staff are paid every week or two. Tuition may come monthly, and subsidy payments come on their own schedule. A line of credit sized to one payroll cycle usually handles that gap at the lowest cost.
Avoid matching that gap with a merchant cash advance collected by a fixed daily debit. An MCA is a purchase of future receivables, not a loan, collected by a split of sales or a fixed debit, subject to reconciliation, and its effective APR may range from 40% to 350% [8]. A center whose income arrives monthly feels a daily debit every single day.
The quiz starts with your industry filled in and shows the products that fit, with cost ranges, before you share contact details. A request for offers goes only to Batch Capital, our own funding service.