How much can a daycare borrow against its tuition deposits?
Between $10,000 and $2,000,000 in working capital, and the exact number is set by three things on your bank statements: your monthly deposits (tuition, subsidy, voucher and food-program reimbursements all count), your slowest month in the statement window, and your average daily balance between those deposits. The floor to be considered is $15,000 a month and 6 months in business. There is no formula based on enrollment, licensed capacity or tuition rate; the underwriter sizes an amount whose payment your slowest month can carry. This guide walks through how that number is reached and how to read the cost.
Published 2026-10-29 · Naptime Capital underwriting desk · No email required
The short answer
A daycare, preschool or child care center can borrow $10,000 to $2,000,000 in working capital from Naptime Capital, and the amount is sized off the business bank statements, not off enrollment, licensed capacity or the published tuition rate. Three figures drive it: total monthly deposits, the slowest month in the statement window, and the average daily balance. Larger amounts with longer terms are available through a term loan or SBA loan, which are sized off tax returns and financials instead.
What “sized off deposits” means
A working capital advance is repaid by a fixed daily or weekly ACH from your operating account. The underwriter’s question is therefore not “how much is this center worth” but “what payment can this account carry every business day, including in its worst month, without going negative.” The approved amount is whatever total that payment supports over the chosen term. Three inputs set it:
- Monthly deposits. Every deposit counts: private tuition drafts, state subsidy reimbursements, voucher payments, food-program reimbursements, employer contract payments. The underwriter does not weight private pay above agency pay.
- The slowest month. The payment is tested against your floor month in the statement window, not the average. A center whose deposits dip over the winter holiday is sized to survive that month. Seasonal programs send four months instead of three so the recovery is visible.
- Average daily balance. Two centers with identical deposits are sized differently if one spends the week before the agency pays at zero and the other keeps a cushion. The cushion is what absorbs a daily payment on a slow day.
What moves the number up or down
| Factor on the statements | Raises the amount | Lowers the amount | What you can do |
|---|---|---|---|
| Monthly deposits | Higher and consistent across the window | Trending down month over month | Route every tuition and agency payment into the one business account |
| Slowest month | Close to the average | Far below the average (a two-week closure, a late agency cycle) | Send 4 months so the catch-up month is in the window |
| Average daily balance | Stays above zero between cycles | Touches zero before each reimbursement | Move autopays to the day after the tuition draft |
| Returned items (NSF) | None, or a cluster tied to one late reimbursement | Recurring every month | Fix the timing first; apply the month after |
| Existing advances | None, or disclosed and consolidated | Undisclosed, or more than one stacked | Disclose up front; ask about a consolidation |
| Term chosen | Longer term (up to 18 months) lowers the daily payment | Short term (3 months) means a larger daily payment for the same amount | Match the term to how long the use takes to pay for itself |
Reading the published example
The representative file on this site is a $150,000 advance over 12 months. The total payback is $190,500, so the cost of funding is $40,500. Repaid daily across 21 business days a month, the payment is $756 a day; repaid weekly it is $3,664. That is an illustration, not an offer, but it shows how the sizing test works: the underwriter is asking whether a $756 debit clears every business day of the center’s slowest month without a returned item. If it does with room to spare, that amount is supportable; if the slowest month would not carry it, the amount comes down or the term stretches until the daily figure fits.
Two features change the effective cost. The payment is fixed, so a strong enrollment month does not speed up repayment the way a percentage holdback would, and a slow month does not slow it. And an advance paid off within the first 30, 60 or 90 days keeps up to 30% of the remaining cost of funding, which matters if the money is bridging a reimbursement you expect to land soon.
When a different product gives a bigger or cheaper number
Working capital is sized off deposits because it is fast and asks for three statements. If the center has 650+ credit, 24 months in business and $40,000 a month in deposits, a term loan is sized off tax returns, a P&L and a debt schedule, runs $50,000 to $5,000,000 over 6 to 60 months, and costs less per dollar. With 680+ credit and a month of runway, SBA 7(a) and Express reach the same ceiling over up to 10 years. A center that invoices an employer, district or agency directly can factor those invoices up to a $5,000,000 facility with no credit minimum, sized off the payer rather than the center. The second-center guide walks through the term loan and SBA side in detail.
What you’ll need
- Your 3 most recent months of business bank statements (4 if your program is seasonal)
- At least $15,000 a month in deposits across those statements — tuition, subsidy, voucher and food-program reimbursements all count
- 6 months in business
- The amount you actually need and what it is for, so the term can be matched to it
- A list of any open advances, with balances and payment amounts
- The 4-minute application — no tax returns under $500,000, no collateral, no business plan
How to get a real number
The only way to know your figure is to let the desk read the statements. Submit the application with three months of statements and you will have an offer in about four business hours with the amount, term, total payback and daily or weekly payment written out. Nothing is pulled on your credit for a working capital offer, and there is no application fee. The working capital page has the full criteria, and the home page has the payment estimator behind the example above.
Related: Working capital · Term loans · Can a daycare get a business loan with bad credit? · What you need to apply.
Related questions
Is a daycare loan sized off enrollment or licensed capacity?
No. Naptime Capital sizes working capital off the business bank statements: monthly deposits, the slowest month in the statement window and average daily balance. Enrollment count, licensed capacity and tuition rate are not inputs.
Do subsidy and voucher deposits count toward how much I can borrow?
Yes, in full. State subsidy reimbursements, voucher payments, food-program reimbursements and private tuition are all deposits, and the amount is sized off deposits. A mostly subsidy-funded center is sized the same way as a private-pay preschool.
What is the minimum a daycare needs to deposit to qualify?
$15,000 a month in business bank deposits, with 6 months in business, for working capital. A line of credit needs $25,000 a month and 12 months; a term loan $40,000 a month and 24 months.
What does a $150,000 daycare working capital advance cost?
The representative example on this site is $150,000 over 12 months with a total payback of $190,500, a cost of funding of $40,500, a daily payment of $756 across 21 business days a month, or $3,664 weekly. It is an illustration, not an offer; your figures depend on your statements.
Can I borrow more by choosing a longer term?
A longer term lowers the daily payment for the same amount, which can make a larger amount supportable on the same statements. Working capital terms run 3 to 18 months. Amounts above what deposits support move to a term loan or SBA loan, which are sized off financials.
How fast do I get the amount after applying?
An offer in about four business hours on a complete file, funded in 24 hours, same day if a clean file is signed before 11:00 AM ET.
Get a real number, not a guide.
Four minutes and three bank statements. Offer in about four business hours, funded in 24. No minimum FICO for working capital.