Am I eligible for a childcare centre loan?
If you are buying a childcare centre, we have access to several commercial lenders that can get you the right loan with great features!
To determine whether you are eligible for a childcare loan you will need to:
- Have at least 25 child care positions available.
- Have current occupancy levels higher than 80%.
- Demonstrate that the income you earn from the facility is twice as much as the interest you will have to pay on the loan.
- Demonstrate that your costs will make up less than 60% of the income earned from the facility.
- Be approved and receive the Commonwealth Government Child Care Benefit.
- Present the required financial documents as low docs loans are not eligible.
- Have experience in this industry.
How much can I borrow?
- Whether you are purchasing a freehold residential or commercial property; where it’s the latter your LVR can go up to 80% of the value of the property whereas commercial child care properties are limited to 70% of the value of the property.
- If you are just purchasing the business (so leasehold) you are limited to 50%-60%of the value of the business.
What do banks consider?
- The likelihood of the success of your application can be affected by whether the property is purposely built as a child care centre or whether it was a residential property that has been converted to a childcare.
- The amount of experience held in the childcare industry- with most lenders wanting to see at least 3 years industry experience.
- Where your childcare property is located; is it a metro area with plenty of potential clients around?
- High occupancy rate with proven track record.
How do banks value my business?
- Banks will attempt your return on investment by using your average income, after expenses, over the last 2 years.
- Banks tend to only consider licenses you hold for places that are for long day care; the value given to these licenses will depend on past performance of the Centre as well as where its located.
Let us do the hard work for you; we have experts that have helped other people with their childcare Centre loans. Let us help you!