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Congress·Reported·about 1 year ago

Congress Moves to Let Nonprofit Child Care Centers Use SBA-Backed Loans, With Limits on Large Borrowing

Also known as: Small Business Child Care Investment Act

Legislative Progress

✓ Filed
Review
Senate
House
President

Impacts

Mixed Impacts(2)
Housing Assistance
Neutral
Child Tax Credit
Neutral
Positive Impacts(2)
Lgbtq
Helps
Disability Benefits
Helps

Key Points

  • Lets certain nonprofit child care providers qualify for SBA-backed loans by treating them like small businesses for these programs.
  • To qualify, providers must be licensed by their state, be a tax-exempt nonprofit, mainly provide child care, and meet size limits for their industry.
  • Loans must be made through banks or other lenders with SBA guarantees; the SBA cannot make direct loans to these nonprofits under this change.
  • For loans over $500,000, the child care nonprofit must get a separate promise from another person or entity to ensure repayment; loans at or below $500,000 can’t require that.
  • Requires the SBA to report to Congress each year on how many loans these providers get and the total dollar amounts.
Small BusinessEducationLabor Employment

Milestones

4 milestones5 actions
Feb 10, 2025Senate

Placed on Senate Legislative Calendar under General Orders. Calendar No. 9.

Feb 10, 2025Senate

Committee on Small Business and Entrepreneurship. Reported by Senator Ernst with an amendment. Without written report.

Feb 5, 2025Senate

Committee on Small Business and Entrepreneurship. Ordered to be reported with an amendment favorably.

Jan 28, 2025Senate

Read twice and referred to the Committee on Small Business and Entrepreneurship.

Jan 28, 2025

Introduced in Senate

What Happens Next

Projected impacts based on AI analysis

Soon after the law is enacted

SBA updates its loan eligibility rules to treat covered nonprofit child care providers as eligible borrowers under 7(a) loans.

Nonprofit child care centers that meet licensing, size, background-check, and non-discrimination certification requirements can start applying through banks for SBA-backed financing.

Soon after the law is enacted

SBA and 504 lenders (certified development companies) begin approving 504 financings for covered nonprofit child care providers.

Nonprofit centers may be able to finance large projects like building purchases, major renovations, or long-life equipment using 504 structures, which can make big projects more doable.

As part of applying for larger loans

Providers seeking more than $500,000 line up a repayment guarantor as part of the loan process.

Some large expansion plans may move forward only if a person or entity agrees to back the loan; some projects may be delayed or downsized if a guarantor can’t be found.

Related News

5 articles
Sen. Jacky Rosen (press release)·about 1 year ago

Rosen, Ernst Introduce Bipartisan Bill to Expand Affordable Child Care Availability, Support Child Care Providers

Announces introduction of the Small Business Child Care Investment Act to let eligible nonprofit child care providers access SBA loan programs such as 7(a) and 504 for expansion and facility investments.

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Sen. Joni Ernst (press release)·about 1 year ago

Ernst Works to Expand Child Care Access for Families and Small Businesses

Describes legislation to allow nonprofit child care providers to participate in SBA loan programs, framing it as a way to improve child care availability for working families and employers.

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Sen. Jacky Rosen (press release)·about 1 year ago

Rosen’s Bipartisan Bill to Help Lower Child Care Costs, Expand Availability Advances Out of Committee

Covers the bill’s advancement out of the Senate Small Business and Entrepreneurship Committee and reiterates that it would open SBA-backed lending options to qualifying nonprofit child care providers.

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Source Information

Document Type

Congressional Bill

Official Title

Small Business Child Care Investment Act

Bill NumberS 273
Congress119th Congress
ChamberSenate
Latest ActionPlaced on Senate Legislative Calendar under General Orders. Calendar No. 9.

Sponsor

Cosponsors

(3)
D: 1R: 2

Analysis generated by AI. While we strive for accuracy, this should not be considered legal or professional advice. Always verify information with official government sources.