Child Care Center Funding Options

While a home daycare can be started with very little initial investment, you will need access to some funding if you are to get started off properly. Let's look at some of the child care center funding options that are open to you if you want to get started in this rewarding and potentially lucrative industry.

The Independent Route

Firstly, you should try to avoid going into debt right away. If possible, fund your child care business independently (through your own funding or family funding) and reserve your access to credit. Things may not go as well as planned during your first six months in business and you may need to seek external funding to tide you over if your business is growing at a rate that is slower than expected. Funding your own venture is the course of action that is most recommended although for many it is just not possible and they do have to look for outside financing or investors for at least part of their child care center startup up costs.

Funding from Partners or Investors

If there are no close friends or relatives lining up to lend you money you may be able to find an investor or partner among your wider circle of associates. In return for their funding you could give them an equity stake and some degree of influence and control over the child care center depending on how involved they wanted to be. Venture capital firms can find these kinds of investors for you but they are usually only concerned with larger startups.

Commercial Bank Financing

Most commercial banks offer small business loans with varying interest rates and varying repayment schedules. Have a solid business.educationeasy.net business plan that you can take to them and make sure that you are prepared to prove to them that you have sufficient funding to cover at least part of the set up costs. It is likely that you will need some kind of collateral that you can sign over to the bank to give them a guarantee that they will be paid back. Having a good account history with the bank in question can also help to secure financing.

Government Grants and Small Business Loans

Various government agencies offer small business loans or even grants that don't have to be repaid at all. The problem here though is that many other entrepreneurs are chasing these limited opportunities so if you want to have any chance of success you have to have a worthy application that outlines not only your business.educationeasy.net business plan but also what your business will do to help your community.

Even though child centers are a unique business model in terms of the service that they provide to families it is still difficult to qualify for any type of government funding unless you are a non-profit. Some states do more than others to provide assistance such as helping you to access credit quicker and at more affordable interest rates.

Credit Card Funding

As a last resort, if all else fails you can simply get some cash advances on a variety of credit cards. Beware though as this method is dangerous due to the high interest rates involved and should only be done if you are confident that your business will grow fast enough to allow you to start making sizable repayments within a few months.

Whatever financing method you use you should make sure that you won't be handing any of the control of your business over to your financiers unless you are perfectly happy with the arrangement. Whether you fund your child care center yourself or through some form of external financing, make sure that you are putting these funds to the best possible use, in a way that allows you to be successful and achieve a high return.

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