Where to Get a Loan

In some states there are loan programs specifically aimed at family child care providers. Many such programs are part of the National Children's Facilities Network.

Contact your local bank or credit union. Your local child care resource and referral agency will be able to give you information about public and private grants or loans that might be available. If you have a permanent life insurance policy (also known as whole, universal, variable, or cash-value insurance) you may be able to borrow against it at a very low interest rate. Your policy may also allow you to pay back only interest. Doing so will reduce your life insurance benefits if you die before paying back the principle. 

There are micro enterprise loan programs that assist small businesses such as family child care providers. For more information, visit http://www.microenterpriseworks.org.

The U.S. government Small Business Administration (SBA) sponsors the Office of Small Business Development Centers (SBDC) that may be able to give you help with your need for a loan by referring you to local resources. Also consider contacting a women's business center in your area. You can find a women's center throuigh the SBA website. 

Ask for help from your family or friends. If you do so, put your loan agreement in writing with a specific plan for repayment (when will the repayments begin, how much will be paid each month, and how much interest, if any, will be due).

We strongly recommend that you do not use your credit card as a source of a loan. Credit card interest (which can exceed 20%) is much higher than any of the loan options identified above. Credit cards should only be used for purchases you can pay off at the end of each month.

Tax note: Any interest you pay on a loan that involves a business purpose is tax deductible. If the loan is for something that is used only in your business (children's furniture, remodeling the basement used exclusively by your day care children, or a swing set when your children are grown), then you can deduct 100% of the loan interest.  If you use the item purchased for both your family and your business (new windows, remodeling the kitchen, etc.), then only a portion of the loan is deductible.  Use your Time-Space Percentage to determine the business portion. 

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