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Grants to Start a Childcare Business

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Image by, courtesy of Ben Ostrowsky

Grants to start a child care business are available from a wide range of sources, including private and public funding. Although child care grants, which provide a lump sum of money to eligible recipients, are an enticing boost to start this type of business, loans are much more prevalent and can be just as effective for getting off the ground or improving an existing business.


Because the majority of child care businesses qualify as small businesses, they have access to government funds reserved for small business loans and grants. Many different government agencies at the federal, state and local level provide start-up capital to small businesses. Many child care businesses are also women-owned businesses, meaning that resources may be available through women's business associations.


Child care grants may be awarded to start a childcare business or to expand an existing business venture, or to assist businesses recovering from a natural disaster. Small-business funding and child care grants are often used to meet the rising demand for child care, so funding may be more readily available in locations that have a rapidly expanding population or few existing options for child care.


Funding to start a childcare business comes in two main forms, grants and loans. Grants are a financial award given to the recipient, and are generally harder to find and more competitive than loans, which are paid back by the recipient. Many small-business loans and child care loans given by the government, however, have preferential interest rates and deferred payment plans, making them better for startup capital than traditional bank loans.


Funding sources to start a childcare business may include the Child Care Bureau, a division of the Department of Health and Human Services, or state-level child services agencies, which can be found through the National Child Care Information and Technical Assistance Center. Sources of small business funding, for which child care businesses may be eligible, include the Small Business Administration and local chambers of commerce. Private funding sources are also an option, and searching regional and national charitable foundations, as well as seeking the sponsorship of well-known charitable donors in the community, can also be a viable source of startup capital.


Child care grants may be difficult to find if you are seeking to open a for-profit business, while certified nonprofit organizations may have greater access to grant funding (as opposed to small-business loans).


Child care grants and loans are listed in a searchable database at Women, minorities, military service personnel, people with disabilities and people in rural communities have the opportunity to identify themselves when searching for grants, since they may qualify for additional funding sources. Although the availability of funding varies by location, people who are seeking to fill a genuine community need or bringing an innovative or scientific approach to the child care industry will be most likely to receive funding.


Lesley Graybeal has been writing articles for internet content since 2006. Her work can be found on a range of hobby and business resource web publications, including and, as well as several academic journals. Lesley earned her B.A. and M.A. degrees in English from the University of Georgia, and is currently completing her dissertation in Social Foundations of Education.