How a Quick Business Loan Can Help Your Daycare Center - Excel Capital Management
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How a Quick Business Loan Can Help Your Daycare Center

According to a 2015 Pew Research Center study, American families are now more likely to have two full-time working parents in comparison to any other point in history.

Some households can afford to have a stay-at-home parent, or close friends or family members who can watch their children, but most families don’t have that luxury.

Due to several factors such as wages not keeping up with the rate of inflation and crippling student loan debt, many times both parents need to work in order to make ends meet.

With very few companies offering child care services, this leaves parents with little to no choice but to find a reliable daycare.

And so, as a daycare owner, you know how much your parents and clients appreciate you and depend on your services.

However, despite all this opportunity, with parents coming and going at various points in the year, often with little to no warning, and the need to maintain consistent marketing if you want to keep your daycare full, it can be difficult to maintain a healthy cash flow.

A quick business loan can help your daycare center not only stay afloat but maintain growth and stay competitive.

preschoolers | Excel Capital Management

How a quick business loan can help your daycare

As a daycare owner, your responsibility is to provide a safe environment where children can learn to grow and be their happy little selves and a place where parents can count on quality child care.

On top of being responsible for the regular duties and challenges that comes with being a business owner, you’re also tasked with taking care of the next generation during important developmental years (and managing their parent’s very unique needs in the process).

Recently, there has been a rise in the demand of high-quality early education, something a well-prepared daycare can help fill the role of.

This is great for business, but it’s not all good.

With stories of child abuse and mismanagement of children occupying the media, more than ever parents are looking at daycares with a critical eye.

The success of a daycare facility depends on their reputation and how well business operations are run– and nearly all of this can be improved with a quick business loan, whether it’s used to improve your facility, acquire better supplies, or enhance your marketing.

Working capital from a small business loan can be used to make improvements in several different areas of your business.

Examples include:

Employee hiring and training

Having a qualified and well-trained staff is crucial to the success of your business, especially as it grows from a one-man show to a thriving daycare center.

Business capital can be put towards recruitment and onboarding, as well as being used to cover gaps in payroll during a down season.

Local research

Researching the community your daycare facility serves is important, especially when business is down and you don’t exactly know why.

You need to know how many child care centers are within the vicinity and what type of services are in demand.

In addition, you should pay attention to existent waiting lists of other early child care centers and daycares as well as their business hours.

What’s the number of working parents in the area with pre preschool age children? Are your prices competitive for the area?

Knowing any of this can help your business grow– but knowing all of it is critical if you really want your business to maximize its success.

There are resources available like Census.gov that can answer those questions and help you find out the demographics of the area so you can tailor your business to the needs of the community.

However, this can take time– and a lot of it. And, chances are, you’re busy enough.

But if you have the capital to hire someone to do the research for you, you can start planning now for exponential growth over the next year.

Marketing and advertising

In addition to ensuring that your daycare center strives for excellence to maximize the effects of worth-of-mouth, getting your business’ name out there by way of marketing is one of the most important things you can do.

Since the internet is typically the first place people go to find information, investing money in website development, paid advertisements, local search engine exposure, and social media marketing isn’t just suggested– it’s critical.

However, hiring a marketing professional can become expensive. Having enough cash to cover these expenses can benefit your business considerably.

Clean new toys and supplies

Last but certainly not least, every daycare needs to regularly invest in new supplies.

A huge part of attracting new customers is offering a great first impression– and at least half the battle is simply having an impressive facility.

When a new potential customer walks in, you want them to see that their child’s potential new daycare is not only clean but warm and welcoming.

But that’s hard to do without the cash to invest regularly in new toys, cleaning supplies, and everything else you need for the day-to-day running of your daycare.

With a small business loan, you can acquire the capital your business needs to tap into regularly to keep your facility not only clean but visually impressive year-round.

girl reading | Excel Capital Management

What are your funding options?

The choices you have for small business funding are no longer limited to what traditional banks have to offer.

With alternative lending, you can now obtain financing for your daycare via one of several unique options, one which is sure to fit your business and accounting practices:

Merchant cash advance

A merchant cash advance, also known as split funding, works on a pay-as-you-earn model.

A flat percentage of your business’ credit and debit sales are automatically debited daily and put towards the repayment of your loan.

If your business does a large amount of sales one day, a larger payment is taken out to pay back the advance.

If a small amount of sales is done that particular day, you pay less. There is no fixed payment amount or maturity date.

This type of loan is available only to businesses that accept credit card payments.

Unsecured business loan

An unsecured business loan is a type of loan that does not require business owners to put up collateral.

As a result, most new companies do not face the fear of losing precious assets in case they cannot repay the loan.

However, banks that offer unsecured business loans place strict guidelines on their programs because they take on most of the risk, and require far more paperwork than alternative financing loans.

Short-term business loans

Short-term business loans are used to fill an immediate financial need and fix cash flow issues.

Most lenders that provide this type of loan do not require a lot of paperwork and they can be used for virtually any business purpose.

Common uses for short-term business loans are inventory purchases, new hires and employee training, equipment repairs, and filling gaps between accounts payable and receivable.

Short-term business loans have a shorter repayment schedule with higher costs. They’re generally paid back via weekly ACH payments.

In contrast, traditional term loans are paid back within a fixed term and a set interest rate.

While traditional term loans allow you to build business credit and have fixed monthly payments, they come with less flexible terms and rates and penalties may be charged if the loan is paid off early.

Business line of credit

A business lines of credit gives a business owner access to a fixed amount of money which they can use according to their need for cash, interest only being paid on the amount of the advance actually used.

How to get approved for a quick business loan

Once you’ve been approved, you can have the working capital you need within a few days.

To make the application process run both quickly and smoothly, there is certain documentation that you should have on hand.

While requirements may vary depending on the lender and financial standing of your business, the following are the core documents you should be ready to submit:

  • Copies of photo ID for all owners
  • Business license
  • Voided check for the business account
  • Proof of ownership

Get the cash your daycare needs to grow

Early child care is critical, and maintaining a program and facility that delivers this to parents in need is a great service.

At Excel Capital, we understand how crucial it is to have the cash your daycare needs to operate smoothly, including everything local marketing to investing in clean new toys and supplies regularly.

For more information about getting a quick business loan for your daycare, complete our short application or call 877-880-8086 to speak to one of our financial specialists.

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