Building
a Child/Day Care Center
What you should know!
Children
who participate in high-quality programs benefit intellectually, physically,
and emotionally. Most child care classrooms are divided into activity
areas: dramatic play space, blocks, quiet reading area, etc. To achieve
the optimal arrangement, the space needs to be big enough, well proportioned
(not too long and narrow, for example), and set up to provide visual
separation between activity areas. Scaling bathroom fixtures, window
placement, and other features to a child’s size helps to foster
a sense of competence. But, by far, the greatest benefit to children
arises from parents and staff feeling greater satisfaction with the
facility and program.
Child/Day
Care Funding Programs
U.S,
Department of Housing and Urban Development
HUD:
The large majority of HUD's funding is distributed in what are called
"formula grants.” Formula grants are administered by state
and local administrations. To find out how you can get connected to
HUD funding opportunities in your community, contact your nearest HUD
field office.
One
of HUD's largest formula grant programs is the Community Development
Block Grant (CDBG) program, which makes funding available for a wide
range of activities aimed at improving neighborhoods. Locate the CDBG
contact person nearest you!
U.S.
Department of Agriculture (USDA)
Rural
Development, Rural Housing Service: The Community Facilities Loan Program
(CFLP) makes loans to develop community facilities for public use in
rural areas and towns of not more than 20,000 people. CFLP funds may
be used to construct, enlarge, or improve community facilities for health
care, public safety, and public services. Child care centers are among
the examples of public service facilities. Loans may also be used for
the operation of these facilities. Eligible applicants are public entities
and nonprofit organizations. Applications can be obtained at any of
the 1,200 USDA Rural Development field offices. For additional information,
contact the USDA’s Rural Housing Service at or on
the Web at http://www.rurdev.usda.gov/rhs/index.html.
Who
may apply: Community Programs can make and guarantee loans to develop
essential community facilities in rural areas and towns of up to 20,000
in population. Loans and guarantees are available to public entities
such as municipalities, counties, and special-purpose districts, as
well as to non-profit corporations and tribal governments.
Loans
and Loan Guarantee Funds
Private
sector funds also can help finance needed facilities and other services
to improve the supply of child care. Because the cost of constructing
child care centers is high, state policymakers have been creating laws
to offer financial assistance such as loans, loan guarantees, bonds
and technical assistance. Some successful child care loan programs are
administered by a community development financial institution (CDFI),
which can generate financing for early care and education facilities.
By working with CDFIs, states can leverage additional federal funds
set up under the federal CDFI act and states can use the CDFI's financial
expertise to manage the loan and provide technical assistance to child
care programs. This approach has been used in Illinois, Massachusetts,
North Carolina, Ohio and San Francisco.
What's
a CDFI?
A community
development financial institution, or CDFI, is a private sector financial
intermediary that has community development as its primary mission and
develops a range of programs and methods to meet the needs of low-income
communities. CDFIs make loans and investments that are considered unbankable
by conventional industry standards and serve borrowers, investees, and
customers not serviced by mainstream financial institutions. They link
financing to other development activities. You can find more information
about the way CDFI’s work here.
What
is a Facilities Loan Fund?
As
described in the previous section, part of the facilities crisis in
community-based family and child services is caused by the lack of capital
to invest in physical improvements and capital purchases. These programs
are often unable to satisfy conventional bank underwriting criteria.
Facilities funds are banking institutions, too; they make loans. But
unlike conventional banking institutions that line Main Street or occupy
the most prominent skyscrapers in every big city, facilities funds are
specialized nonprofit lending institutions. They are one of a broader
class of lenders known as "development lenders" or CDFIs that
are designed and capitalized to enable them to make some types of loans
that commercial lenders find unattractive. The loans might be too small
to be profitable. The borrower or project might be too risky for a variety
of reasons. There may be insufficient collateral to secure the loan.
The borrower may be unable to make a sufficiently large down payment.
Perhaps there simply is not enough revenue to pay commercial rates of
interest.
The
Community Reinvestment Act – How it works for you
Pressures
do exist tobank lending to borrowers that are sometimes denied
credit. The Community Reinvestment Act (CRA) has succeeded in getting
banks to look more closely at potential loans they might once have rejected.
The CRA also requires that banks insured by FDIC to adhere to certain
guidelines. These guidelines are to the benefit of individuals and business
that are located in what is referred to as "economically depressed"
areas. CRA also requires financial institutions "give back"
to the communities they are located in. This means that often banks
will provide seminars or programs to educate community members about
financial resources available to them. They may also provide lower interest
rate loans to churches or other non-profit organizations to develop
facilities that will benefit the community over all (i.e. day/child
care facilities). The best source of information on such opportunities
is your local bank.
Technical
Assistance
гуманное усыпление животных
Although
making loans is a lender’s most obvious function, development lenders
generally do more. Most provide technical assistance. Self-Help’s
community facilities loan program published an excellent guide to understanding
a child care program, The Business Side of Child Care: A Reference Manual
for Child Care Advocates and Lenders (September 1997). The Nonprofit
Facilities Fund of New York produces materials and offers training in
facilities management. The Local Initiatives Support Corporation and
its affiliate, the Community Investment Collaborative for Kids (CICK),
make recoverable grants that enable providers to pay architectural,
legal, and consulting fees to the members of the development team who
plan the facilities project. The Child Care Capital Investment Fund
has made grants to pay for an architect and a child care program consultant
to jointly assess a provider’s space and make recommendations for
how to improve it. The Ohio Community Development Finance Fund trains
Head Start grantees in how to plan and finance new facilities. These
are just some of the technical assistance initiatives sponsored by community
facilities lenders.
Good
Websites
http://www.schoolgrants.org/
http://www.schoolgrants.org/welcome.htm
http://www.providerwatch.com/resourcelinks.html#state
Daycare
regulations listed by state.
http://www.rurdev.usda.gov/nc/comfacil.htm
http://www.ccdcorp.org/daycare.htm
http://kingdom-business.com/Churchfinance.htm
Loans
http://www.religiousloans.com/index.jsp
http://www.churchloans.com/
