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Capitalizing Child Care: The National Landscape of Grants, Loans, and Community Development Capital in Early Childhood Education & Child Care Finance Map

The COVID-19 pandemic highlighted the substantial gaps in access to child care and the important role of this industry in our economy. As continues to recover, more attention is being paid to the fragility of the system, in particular the tenuous operating model and the high cost of building and maintaining a high-quality supply of child care that meets the needs of families. Less attention, however, has been paid to the role that access to capital plays in supporting child care programs.

This paper describes early lessons and findings from a joint project between the National Children’s Facilities Network (NCFN) and Reinvestment Fund to identify and map the financial institutions and intermediaries that help finance the child care industry — including child care business operations and physical facility spaces. This effort focuses on three major sources of capital: lenders participating in the Small Business Administration (SBA) loan programs, Community Development Financial Institutions (CDFIs), and philanthropic support from foundations.

Child Care Finance Map
A healthy child care sector requires a robust financial infrastructure that can support the industry’s capital needs: start-up funding to create new child care programs, working capital for business stabilization and maintenance, and growth capital for facility expansion and quality improvement.

The Child Care Finance Map is a joint effort between the National Children’s Facilities Network and Reinvestment Fund to measure capital access in the child care industry. The tool was designed to help stakeholders identify the sources of capital that are currently supporting child care providers in their communities. This first iteration of the tool maps the flow of Small Business Administration funding, Community Development Capital, and Philanthropic Grantmaking to child care businesses to every county in the U.S.

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