Loan Size Example

$3 Million Daycare SBA 7(a) Acquisition

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $3 million daycare SBA acquisition typically combines real estate, FF&E (classroom furniture, playground equipment, kitchen equipment), franchise fees, and goodwill for a single-location franchise (Primrose, Goddard, KinderCare, Children's Lighthouse) or independent daycare. Most $3M daycare SBA acquisitions allocate $1.5M to $2M to real estate and $1M to $1.5M to operating business.

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Capital Stack

What a $3M Daycare SBA Capital Stack Looks Like

$3M daycare SBA acquisitions typically combine SBA 504 for real estate and SBA 7(a) for operating business including franchise fees and FF&E.

Capital Source	Rate / Cost	Size / LTV	Notes
SBA 504 real estate	Bank 1st 7.00% / CDC 5.85% fixed	$1.8M / 80 to 90% LTC	Special-purpose adjustment varies
SBA 7(a) operating	Prime + 2.50%	$1.2M / 90% LTC	FF&E + franchise fees + working capital + goodwill
Specialty childcare bank (Live Oak)	Prime + 2.00 to 2.75% (SBA wrap)	$3M / 85 to 90% LTC	Live Oak dominant in childcare
Total SBA	Blended ~6.95%	$3M / 88% LTC	$360K borrower equity

Pricing reflects active CLS CRE quote pipeline as of April 2026. Specific deal pricing depends on sponsor, property, and structure.

Sponsor Profile

Who Closes a $3M Daycare SBA Deal

Typical $3M daycare SBA sponsors are first-time franchisee owner-operators (often with education, healthcare, or childcare industry experience) or experienced multi-location daycare operators. National franchise brands streamline SBA underwriting.

From the CLS CRE Pipeline

A Real $3M Example

On a $3.0M acquisition of a Primrose Schools franchise in a Texas Sun Belt suburb, the buyer was a first-time childcare operator with prior elementary school administrative experience. Combined SBA 504 + 7(a) at 88 percent LTC.

Anonymized. All deal references protect borrower and lender identity.

FAQ

$3M Daycare SBA 7(a) FAQ

Primrose Schools, The Goddard School, KinderCare, Children's Lighthouse, Kiddie Academy, Tutor Time, and most major childcare franchises are on the SBA Franchise Directory.

Sometimes. Purpose-built daycare facilities can be classified as special-purpose (20 percent down). Adaptive reuse retail or office space sometimes qualifies as standard 10 percent down.

State Department of Family Services or Department of Early Childhood licensing for both the facility and the operator. Licensing transferability at sale is a closing item.