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How to Start a Home Daycare With Other Peoples Money


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Have you decided how you're going to finance your home daycare? When starting a home daycare there is no true fixed amount as to home much its going to cost you, but be ready to spend any where from $1000 to $5000 to set up shop. I believer start up cost for home daycares differ from owner to owner. What you may want to implement in your business, the next provider may not want to do the same.

If you don't have enough money you can start by looking to other sources such as these:

Private Sources:
The most common private sources can range from your own funds, to family, and friends.

What are the advantages of investing your own money?

1. There are no finance charges

2. Your search for additional funds is minimized.

What are the disadvantages of investing your own money?

1. You lose the interest you could be earning on your money

2. You lose your savings that could probably go towards any future emergencies.

Borrowing from family and friends can provide several advantages such as:

1. They are less likely to make demands on your style of management

2. There is no legal limit on how much you can borrow

3. The terms of borrowing can be negotiated and usually are more flexible than those of commercial sources.

The disadvantage of borrowing from family or friends is who not knowing what will happen if the money is not paid back on time properly.

Commercial Banks

I personally wouldn't go this route you will see why later on. But nonetheless, if you have to start here than start. . When applying for money from a bank or individual investor, show a willingness to invest your own money. You must be willing to risk your assets if you expect others to risk theirs.

To find banks in your area look in the Yellow Pages. You can also request a referral from a trade association, management consultant, attorney, accountant, friend or relative.

Government Agencies

Government agencies offer individual financial assistance to small businesses. Many loan programs, administered under government guidelines and funded by the government, are available. There are plenty of programs out there to assist different businesses.

Keep in mind that getting help from government agencies will require about the same amount of work as going to a bank, you will still have to putt up collateral

For an up-to-date list of loan programs and their requirements, contact your local Small Business Administration (SBA) office (for information on federal loan programs) or your state economic development office (for information on state loans and grant programs).

Grant Programs

Grants are sums of money provided to businesses without a repayment obligation. Grants are generally reserved for research and development and nonprofit organizations; but many home daycares qualify for grant programs. There are private and government funding sources where you can apply for a grant. For most you will have to submit a written proposal to the agency, organization or foundation where you are applying for a grant.

If your proposal is rejected, find out why. Ask if how and if you can resubmit your proposal.

Other Sources

Credit unions and life insurance companies also can be a source of funds. Whatever financial institution you decide approach, show a willingness to risk your own money and have a business plan or proposal that is well written and well thought-out.

For more tips and advice on financing your home daycare please visit


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