Term loans for the new classroom, the second center, and the way out of stacked advances.
Naptime Capital places child care term loans from $50,000 to $5,000,000 over 6 to 60 months, with a 650 minimum FICO, 24 months in business, and $40,000 a month in deposits. Files up to $500,000 are underwritten in-house; above that we package the file and place it with our bank lending partners. Decision in 3 to 7 business days.
What are the criteria?
Term loan — criteria
- Amount
- $50,000 – $5,000,000
- Term
- 6 – 60 months
- Minimum credit score
- 650
- Minimum time in business
- 24 months
- Minimum monthly deposits
- $40,000 — tuition, subsidy and voucher deposits all count
- Documents
- Application, 6 months of business bank statements, 2 years of business tax returns, YTD P&L and balance sheet, debt schedule
- Repayment
- Fixed monthly or bi-weekly ACH, fully amortizing
- Collateral
- UCC-1 blanket lien. Personal guarantee required.
- Prepayment
- No prepayment penalty on in-house files up to $500,000. Partner-placed files vary — disclosed in the term sheet.
- Decision
- 3 – 7 business days
- Path
- In-house to $500,000; placed with bank lending partners above
What jobs does a term loan do for a child care operator?
A new classroom and a higher licensed capacity
The build-out, the furniture and cots, the added bathroom, the ratio-driven hires, and the inspection that raises your license number. Match the term to the years the room will generate tuition — 36 to 60 months, not 9.
Term matched to the assetPlayground, fencing and safety upgrades at licensing
Surfacing, shade, fencing, fire-safety and sprinkler work flagged at renewal or required for a capacity increase. Multi-year assets on a monthly payment.
Term matched to the assetA second center
Build-out, licensing, pre-opening payroll and the first months of rent before enrollment carries it. SBA 7(a) costs less for the same project if you have the time and the credit.
36 to 60 monthsBuying out a partner
Common when one owner wants out and the operating director doesn’t have the cash. SBA 7(a) explicitly allows this use too, and costs less if you can wait.
36 to 60 monthsConsolidating stacked advances
This is the one we get called about most. Three or four daily positions with overlapping debits will take a full, profitable center down. A 36-month term loan at a single monthly payment is almost always the fix, and the earlier you call, the more room we have.
The consolidation pathVans, kitchen and the things a center runs on
A transport van that passed its last inspection by a hair, a commercial kitchen upgrade for the food program, a security and check-in system. Financed inside the term loan, not as a separate product.
Term matched to the assetAdvance or term loan — which one?
Same money, two very different shapes. The advance buys speed. The term loan buys a payment you can live with.
| Working capital advance | Term loan | |
|---|---|---|
| Amount | $10K – $2M | $50K – $5M |
| Speed | 24 hours | 3–7 business days |
| Minimum FICO | None | 650 |
| Time in business | 6 months | 24 months |
| Payment frequency | Daily or weekly | Monthly or bi-weekly |
| Cost | Highest of the five products | Mid-range |
| Paperwork | 3 bank statements | Statements, returns, P&L, debt schedule |
| Best when | Payroll is Friday and the reimbursement is not | You can wait a week and want the lower payment on a multi-year project |
Who underwrites a child care term loan?
Up to $500,000 — in-house
Naptime Capital underwrites and funds these directly. You deal with the desk that makes the decision, and there is no prepayment penalty.
Decision in 3 to 7 business days on a complete file.
Above $500,000 — bank partners
We package the file — statements, returns, P&L, balance sheet, debt schedule, license — and place it with our bank lending partners. The partner is identified to you in writing before you sign.
Prepayment terms on partner-placed files vary and are disclosed in the term sheet.
What does a child care term loan cost per month?
A center with 4 years in business, a 680 FICO and $90,000 a month in deposits replaces three daily-debit advances with one monthly payment. At $250,000 it stays in-house, so there is no prepayment penalty.
Illustrative only. Your actual amount, cost and term are set by underwriting your file. Nothing on this page is an offer.
Representative file — $250,000 over 36 months
- Amount
- $250,000
- Term
- 36 months, fixed monthly
- Rate
- 14% APR — illustrative
- Monthly payment
- $8,544
- Total interest
- $57,599 over the full term
- Prepayment penalty
- None on in-house files up to $500,000
- Status
- An illustration, not an offer
Term loan questions, answered.
Can I use a term loan to pay off merchant cash advances?
Yes. Consolidating stacked advances into a single amortizing term loan is one of the most common uses of this product. Three or four daily positions with overlapping debits will take a full center down; a 36-month term loan replaces them with one monthly payment. Call before you take a fourth position — the earlier you call, the more room there is to work with.
Can I finance a licensing-required upgrade before the inspection?
Yes. Playground surfacing and fencing, fire-safety work, a sprinkler retrofit, an added bathroom for a new classroom — these are multi-year assets and a term loan matches the payment to that life. If the inspection date is inside a week, working capital funds faster and a term loan can refinance it afterwards.
What does the bank partner need that Naptime doesn’t?
On in-house files up to $500,000 we work from six months of bank statements, two years of business tax returns, a YTD P&L and balance sheet, and a debt schedule. Above $500,000 a bank partner will typically also want personal tax returns, a personal financial statement, entity documents, your license, a lease or mortgage, and interim financials.
Is there a prepayment penalty on a child care term loan?
Not on in-house Naptime Capital term loans up to $500,000. Partner-placed term loans and SBA loans follow the partner’s and the SBA’s prepayment terms, which are disclosed in the term sheet before you sign.
Do you lend against the center’s real estate?
Not as a term loan. Owner-occupied child care real estate is an SBA 7(a) or 504 structure or a commercial mortgage — see SBA loans, where real-estate-secured financing runs up to 25 years.
Can a center with 18 months in business get a term loan?
Not at the 650 FICO and 24-month minimum this product carries. Working capital is your path until you cross 24 months — no minimum credit score, 6 months in business, $15,000 a month in deposits.
What is the monthly payment on a $250,000 child care term loan?
At an illustrative 14% APR over 36 months, a $250,000 term loan is $8,544 a month, with $57,599 in total interest over the full term and no prepayment penalty on in-house files up to $500,000. Your rate is set by underwriting; this is an illustration, not an offer.
A single monthly payment beats four daily debits.
$50,000 to $5,000,000 over 6 to 60 months. Decision in 3 to 7 business days. If you are carrying stacked advances, call before you take another position.