Finding funding is a large part of the process of starting a daycare. You may have decided upon a location for your daycare business, are abreast of your business’ licensing requirements and regulations, have set up your business structure, and have creating a business plan. But where will you find the funds to start and run a daycare business. Besides your own resources, where will you come up with initial funding for your daycare business?
There are many funding options available for your daycare businesses. Once you have gathered funds from your own resources, friends, family, and your business partner (if this applies), the next step is to look into government programs for daycare grants and loans. First contact the United States Small Business Administration. Many government programs offer grants and subsidies to childcare businesses.
A subsidy is an ongoing payment, usually provided by the government, which covers essentials such as food. Subsidies are typically based on need. Subsidies are given to the individual in need to give to the center, or given directly to the daycare center on behalf of the individual in need.
A daycare grant is a one-time payment given to a childcare center for a specific need or project. There are several types of grants available: Local grants, federal grants and private grants. The best places to start looking for daycare grants and subsidies are your National Child Care Resource and Referral Agency (NACRRA), Head Start, Child Care and Development Fund (CCDF), and Child and Adult Care Food Program (CACFP).
One word of advice: Before applying for a daycare grant, it is important that you develop a detailed business plan. The business plan illustrates why your daycare center qualifies for the grant above others.
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