MINNESOTA · NAICS 624410
Minnesota childcare deals are projection-based, with licensure capacity and enrollment ramp driving the model. Childcare drew $22 million across just 23 calendar 2025 loans, among the largest average tickets in the state's book, against one of the country's highest-cost childcare markets.
FEASIBILITY TRIGGER
Childcare deals are projection-based; licensure capacity and enrollment ramp drive the model.
Between FY2010 and FY2026, SBA lenders approved and disbursed 316 7(a) and 504 loans for childcare center projects in Minnesota, totaling $219.4 million in approved financing at an average of $694,000 per loan. Minnesota ranks #13 of 38 states tracked for childcare center SBA lending volume and accounts for 2.2% of national childcare center SBA dollar volume. 69.6% of these loans were made under the 7(a) program, the remainder under 504. 42 loans have been approved since FY2024.
| Disbursed loans (FY2010–FY2026) | 316 |
| Approved volume | $219.4 million |
| Average loan size | $694,000 |
| 7(a) share | 69.6% |
| Approvals since FY2024 | 42 |
| State rank by loan count | #13 of 38 |
Among the 243 seasoned loans in this segment (approvals FY2010–FY2021), 2.5% reached adverse resolution — purchased, liquidated, or charged off. The national benchmark for childcare center is 4.0%, against 7.3% across all industries. That performance runs below the national benchmark for this asset class, a credit-positive signal for lenders.
Source: SBA 7(a) and 504 FOIA loan-level data, as of March 31, 2026. Disbursed loans only. See data methodology.
A 2.5% adverse-resolution rate below the national childcare center benchmark of 4.0% supports the credit story for well-underwritten Minnesota projects in this class. Across 316 SBA loans averaging $694,000, that track record does not eliminate the need for a third-party feasibility study, but it means a rigorous study reinforces rather than defends the projections.
Every Minnesota childcare centers project we underwrite follows the same lender ready process: independent market analysis, site and technical review, and financial projections tested against SBA SOP 50 10 8 standards. Our SBA feasibility study consultants guide explains scope, timing, deliverables, and what lenders and CDCs expect in the report.
Minnesota projects often pencil under SBA 504 because the 50/40/10 structure delivers up to 90 percent financing on owner-occupied real estate at a fixed debenture rate, and the state's calendar 2025 average rate ran 0.63 points below the national figure. SBA 7(a) covers acquisitions, working capital, and equipment, and from July 4, 2026 eligible borrowers can combine 7(a) and 504 for up to $10 million in total program credit.
Childcare drew $22 million across just 23 calendar 2025 Minnesota loans, among the largest average tickets in the state's book, against one of the country's highest-cost childcare markets.
For a national view of this asset class, see our childcare center SBA feasibility overview, and read our related analysis in the childcare center lending research on our blog.
Public SBA and CDC program records, cited as program evidence
SBA 504 through Capital CDC with VetLoan Advantage
Veteran-owned center retaining 29 jobs, national program evidence
The Woodlands, Montgomery County, Texas
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