Use this checklist to assess businesses in this industry for SBA 7(a) lending and underwriting.

👨‍💼 Owner Role + Staff Coverage

• Is the owner teaching, directing, or managing enrollment?
• Are there credentialed staff in place to replace the owner?
• Are staffing levels sufficient to meet licensed capacity?
• Is a director or assistant director formally employed and paid market wages?

🏷️ Licensing + Regulatory Review

• Is the business operating under a current, transferable childcare license?
• Are staff-to-child ratios in line with state mandates?
• Are there health/safety inspection reports available?
• Are any violations, compliance issues, or capacity constraints disclosed?

📄 Enrollment + Facility Risk

• What percentage of enrollment is part-time vs. full-time?
• Are age groups (infant, toddler, pre-K) balanced across capacity?
• Are facilities leased or owned, and is the lease SBA-compliant?
• Is enrollment dependent on owner presence or local reputation?

🚩 Red Flags

• No licensed director or full-time admin staff
• Owner involved in every aspect of daily operations
• Addbacks for family wages, snacks, or personal perks
• Licensing status not clearly documented

📌 SBA SOP Tip

Childcare centers must reflect sustainable staffing, regulatory compliance, and transferable goodwill. Adjust for owner labor and verify licensing to meet SBA FMV standards.