Daycare Business Loans

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Daycare financing

Small Business Loans for Day Care & Child Care Business

Daycare services are always in demand and if you have a talent and love for entertaining little ones, it can be a lucrative way to spend your time helping give children the best start in life. That said, many of the improvements and business expansions you can decide to make come with a high price tag, and so you’ll likely need a daycare business loan to grow your business.

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What are daycare business loans?

A daycare business loan is any form of financing you borrow to fund your daycare business, whether this be to cover everyday expenses, renovations, or purchase of a new location.

In most cases a daycare business loan is a lump sum you borrow and pay back (plus interest) over a term of months or years. Most daycare business loans can be used for any business purpose, but some are tied to certain purchases.

Best Daycare & Child Care Business Loans


OnDeck Business Loan Review


Funding: Borrow $5,000 - $250,000
Minimum Credit Score: 600
Loan term: up to 36 months
Funding turnaround: as soon as same business day

OnDeck offers fast business loan options such as term loans, business lines of credit, and SBA PPP loans and funding as fast as 24 hours. Minimum requirements include: at least 1 year in business, 600 credit score, $100,000 in gross annual revenue and a business checking account.

OnDeck is a popular short-term business loan provider. The company is popular due to its fast funding; some borrowers often see the funds the same day. They accept lower credit scores than other lenders but their interest rates vary notably, from 9% up to 99%.

  • Minimum credit score: 600
  • Minimum time in business: 1 year
  • Minimum annual revenue: $100,000
  • A minimum of two years must have passed since a bankruptcy
  • Requires personal guarantee and business lien




Funding: Borrow $5,000 - $250,000
Minimum Credit Score: 600
Loan term: 6-12 months
Funding turnaround: 24-48 hours

With BlueVine, borrowers can get approval as fast as 24 hours and obtain a business line of credit for short term capital needs while only paying interest on the funds you borrow.

BlueVine offers business lines of credit with rates starting at 15%. This lender typically sets up lines of credit quickly - in as little as 12 hours in some cases. Repayments are weekly and you must have been doing business for six months before you’re eligible.

  • Minimum credit score: 600
  • Minimum annual revenue: $120,000
  • Requires personal guarantee and business lien
  • Weekly repayments


Kabbage Business Loan Review


Funding: Borrow $1,500 - $150,000
Minimum Credit Score: 640
Loan term: 6, 12 or 18 months
Funding turnaround: As soon as 1-3 business days

Kabbage offers borrowers a credit line up to $150,000 with monthly repayment options and no prepayment penalties. Approval as fast as same business day.

Kabbage offers flexible payment options and fast funding. They lend between $500 and $250,000 on a short-term basis of 6 months to a year. Kabbage also offers a business line of credit if that’s a better fit for your business.

  • Minimum credit score: 640
  • Minimum time in business: 1 year
  • Minimum annual revenue: $50,000
  • A minimum of one year must have passed since a bankruptcy

How can a daycare business loan benefit your business?

One of the most obvious ways a daycare business loan can benefit you as a business owner is the immediate capital you’ll have access to. Starting and running a daycare is an expensive task and your business loan can serve several functions. Here are a few things financing can be used for:

  • Purchasing a daycare franchise or real estate for your daycare facility
  • Acquisition of an existing daycare business
  • Renovating or repairing your site
  • Purchasing furniture, supplies, food, and entertainment products
  • Manage cash flow
  • Paying staff

Types of daycare business loans

Here are some of the most commonly-used types of daycare business loans:

  • Term loans: Term loans are the most popular form of borrowing if you’re looking to borrow a lump sum. This is the traditional form of loan where you borrow a lump sum and pay it back weekly or monthly over a short, medium, or long term. This can be as little as 3 months or as long as 10 years. While term loans are available from banks at low interest rates, only those with excellent credit, high turnover, and a long time in business are likely to qualify. If you don’t think you’ll qualify for a bank loan, a term loan from an alternative lender online is the best option. There are plenty of lenders to choose from with varying qualification requirements and terms, so you’ll be able to find the right loan for you.
  • Business line of credit: A business line of credit acts like a credit card, in that you are given a credit limit and can borrow any amount up to that limit. You only pay interest on the money you’ve actually borrowed, and you can use credit again once you’ve paid it back. This is a particularly good option for those looking for flexible borrowing.
  • SBA loan: SBA loans are particularly desirable because they’re guaranteed by the Small Business Administration, which makes the lenders they work with more willing to lend large amounts of money and at better rates and terms. All SBA loans have an interest rate between 2% and 13%, so they’re some of the lowest on offer besides bank loans.There are 3 types of SBA loan on offer, the 7(a) loan which is the most popular and most versatile, the 504 loan, which can be used to purchase major assets (such as real estate), and microloans. The 7(a) and 504 programs both offer loans up to $5 million, while the microloan program offers loans of up to $50,000 through local lenders and organizations. Most SBA loans have strict requirements, so you’ll generally need to have good credit, annual revenue over $50,000, and have been in business for at least 2 years to qualify.

Alongside the primary types of loans available to daycare businesses, you could also consider a commercial real estate loan if you’re looking to buy or renovate real estate. Another option is a business credit card, in which you only pay interest on the money you borrow. It might also be a good option if you’re a new business and don’t qualify for a small business line of credit.

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Pros and cons of daycare business loans


  • Daycare businesses will always be in demand, so you have good revenue opportunities
  • You can grow your business quickly
  • You can ensure your business offers all the amenities parents are looking for
  • You can keep hold of your working capital


  • Interest rates can be high
  • It’s difficult for new businesses to borrow
  • Most loans require a personal guarantee and business lien, which puts all your assets (personal and business) at risk

How much does a daycare business loan cost?

The biggest factor in how much a business loan costs is the interest rate - you need to compare loans and try to secure the loan with the lowest interest rate you can. Use the calculator below to find out how much your loan may cost you:

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How to get a Daycare Business Loan

Requirements vary from lender to lender and depending on the type of loan you’re applying for, but to get reasonable rates you’ll need:

  • You have a credit score over 600
  • Have been in business for over 1 year
  • Have an annual revenue over $50,000
  • Have no history of bankruptcies within the last 7 years

The application process for business loans is generally quite straightforward and can be done online. The application process varies from lender to lender, but you’ll usually need:

  • Business and personal tax returns
  • Details of current debt
  • Bank statements

You also may need to provide a business plan, profit and loss statement, and other documents. Make sure you check the lender’s requirements before you start your application, but don’t panic if you don’t have them all to hand, as most online applications can be saved so you won’t lose your progress if you need to get another document together.

Apply for daycare and childcare financing

Whether you’re planning to apply for a term loan or a business line of credit, it’s important to compare interest rates and secure the lowest rate you can. The interest rate will be the biggest factor in deciding how affordable–or not–you find your loan to maintain and pay off. Start your search here by comparing the best daycare business loans in our tables and when you find the one that’s the right fit for your business, click “apply.” You’ll soon have the funding you need to grow your business.

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