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Facility Improvement Forgivable Loans

Allowing child care facilities to access funds and invest in their businesses.

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OVERVIEW

The Facility Improvement Loan Guarantee program will repay SBA loans up to $10,000 following the completion of approved projects. Projects should allow childcare providers to improve the efficiency, safety, and learning at their facility or allow them to serve younger children.

Providers Retention Bonus

Facility Improvement Loan Guarantee Program

Child care facilities are unique businesses that often don’t see a clear dollar-for-dollar return on investment, which makes it difficult for them to access traditional funding and invest in improvements. This program will provide SBA loans of up to $10,000 for approved projects.

 

Once the project(s) are complete, AEDC will use ARPA funds to pay off the loan balance. Payments will be deferred for six months.

 

What this means for child care business owners is that they can access up to $10,000. As long as the project is completed within six months, they will make no payments on the loan. 

Next Steps...

  1. Download our template for the Project Plan. Complete it and submit a PDF to Jade at jade@aedc1.org.

  2. Once the project plan is approved, Jade will send a .pdf copy of the loan application.

  3. Before the loan disbursal, we will coordinate a site visit and get SBA document signatures.

  4. The applicant will complete the project.

  5. Once the project is complete, we will schedule a second site visit to verify the use of funds.

  6. Applicant submits receipts/applies for the grant.

  7. AEDC pays off the loan.

Project Plan

A project plan template will be provided. The primary purpose is to  answer the following questions:

  1. Describe your planned project, including how this project will improve your childcare facility. 

  2. Provide an estimate of your project budget, including the SBA loan you are applying for and any other funds you may use to complete it. 

Project Examples

  • Investment in equipment such as cribs, cots, tables, highchairs, indoor and outdoor toys, playsets, bathroom accessories, strollers, changing stations, etc.

  • Investment in the environment, such as any improvement to indoor or outdoor play space, adding fencing, lighting, flooring, paint

  • Investment in modernization/efficiency, such as computer equipment, cameras, and subscriptions for childcare software

Unacceptable Uses of Funds

  • Employee payroll or bonuses

  • Taxes

  • Repayment of other debts or loans

  • Improvements to the non-childcare portion of the home (for home-based facilities)

Steps to Apply

1. SUBMIT YOUR PROJECT PLAN

2. GET YOUR LOAN

  • Jade will follow up with the application and set up the next steps to proceed with your loan. 

  • Once the loan is accepted, you can complete your project or facility renovations!

3. APPLY FOR LOAN FORGIVENESS

  • Once the project is complete, we'll schedule a visit to verify the use of your funds.

  • Keep all your receipts and paperwork from your project, so you can submit them and apply for the loan forgiveness grant. 

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  • What happens if I do not complete the project before the deadline?
    Interest and payments are deferred for the first six months, then the provider will be responsible for making payments on the loan (interest and principal).
  • What kind of projects or expenses are not eligible for this program?
    Employee payroll or bonuses Taxes Repayment of other debts or loans Improvements to non-childcare portion of the home (for home-based facilities)
  • What is the deadline for applying?
    The funds are available on a first-come, first-served basis, and we will accept applications until the funding is exhausted. We expect to be able to provide up to 40 these loans.
  • What is the interest rate?
    7.5%
  • Are there any fees that I am responsible for?
    No! The program is paying for the credit check, UCC filing fee, accrued interest, and loan origination fees. If the participant does not complete the project in the six-month time frame, they will be responsible for making the loan payment.
  • Can I buy inventory?
    No.
  • Can I participate in this program multiple times?
    No.
  • What if I have multiple centers?
    One loan per center location will be eligible to participate in the loan forgiveness program.
  • How much can I borrow?
    The maximum is $10,000.
  • What if my project comes in under budget?
    Suppose your project comes in under budget, and you have money left over. In that case, you can submit an amendment to your project plan to add additional approved purchases.
  • What kind of projects are allowed?
    Investment in equipment such as cribs, cots, tables, highchairs, indoor and outdoor toys and playsets, bathroom accessories, strollers, changing stations, etc. Investment in the environment, such as any improvement to indoor or outdoor play space, adding fencing, lighting, etc. Investment in modernization/efficiency, such as computer equipment, cameras, and subscriptions for childcare software
  • Is there a deadline for this application?
    Retention bonuses will be distributed on a first-come, first-served basis. Funds will be distributed approximately 30 days after the application has been approved.
  • What if I had COVID-related closures?
    COVID-related closures do not impact your eligibility.
  • What if I operate multiple centers?
    A grant is available for each address, not each individual license. If you operate multiple centers, please submit a separate application for each.
  • Is this bonus taxable?
    Yes, there are tax implications for receiving this bonus. Since everyone’s situation is different, we recommend working with a tax consultant to understand how it is likely to impact you.
  • What if my program closes for the summer?
    If your program closes for the summer, you must show that you were open as of May 1, 2021 (or earlier) and remain open until the start of your summer session date in 2023.
  • My facility has two owners. Are we eligible for two bonuses?
    No, each facility is only eligible for one retention bonus. The owner that does not apply for the facility bonus can apply for the employee retention bonus [link] if they work directly with children.
  • I opened my facility in 2022. Am I eligible for this bonus?
    Yes! Facilities that opened after the start of the first eligibility period (after July 1, 2021) will be eligible for the second disbursement of the retention bonus. Applications for the second round will be available after June 30, 2023.
  • I am the director of a non-profit center. Are we eligible for the retention bonus?
    The facility retention bonus is only available for for-profit childcare facilities, but the employee retention bonus [link to employee page] is available for anyone providing childcare in a licensed facility.
  • What if my program closes for the summer?
    If your program closes for the summer, you must show that you were employed as of May 1, 2021 (or earlier) and remain employed until the start of the summer session date in 2023.
  • What if I held a part-time position for a part of the timeframe and a full-time position for another part?
    The bonus will be prorated based on the number of months in each position. For example, if you worked half-time for six months and full-time for 18 months, you would be eligible for $2,750 (total, paid in two installments). If you work part-time for one year and full-time for one year, you would be eligible for $2,500.
  • What if I split my duties between child care and administrative tasks?
    The bonus is based on time spent working directly with children. If you worked an average of 12-20 hours per week on child care tasks, you will be eligible for the part-time bonus. If you average over 21 hours per week on child care tasks, you will be eligible for the full-time bonus.
  • What if I worked for multiple employers during this time period?
    Please gather a separate Employment Attestation for each facility at which you worked.
  • What if I was out of work due to COVID closures?
    Closures due to COVID-19 do not impact eligibility.
  • Is there a deadline for this application?
    Retention bonuses will be distributed on a first-come, first-served basis. Funds will be distributed approximately 30 days after the application has been approved.
  • Is the bonus taxable?
    Yes, there are tax implications for receiving this bonus. Since everyone’s situation is different, we recommend working with a tax consultant to understand how it is likely to impact you.
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