Obtaining Finance for Your Day Care Business

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Opening a day care is a dream nurtured by many people for
many reasons.  Some of these individuals may work in a day
care center and believe they could do a better job with
the added benefit of becoming self employed.  Many stay at
home parents figure they are already doing child care what
difference would a few extra kids make except an increase
in income. And lots of people are just straight tired of
nine to five working for a boss who doesn't care about
them.  So they dream.  But, most of these people that want
to establish a child care business never succeed in doing
so due to a lack of funding.  However, there is hope and
this article will introduce you to ideas on how to obtain
the financing required to start a day care business.

The first method that is involved in obtaining financing
when you want to open a daycare center at home is to
develop an effective business plan. Your business plan
exposes the building blocks of your child care business.
Every business has to have a plan, even if it is a business
that will be operated from home thus providing you with the
methodology behind your daycare business. Essentially, your
plan will be a professional presentation of your research
and diligence which is vital when you approach any
financial institution for loans. It may include the general
purpose of your daycare, how you plan to separate your home
life from your business life, how you will use your home
effectively to operate the child care services that you
will provide, as well as how much money you expect to gain
from your daycare at home.

The second method involved in order to obtain financing
when you want to open a daycare at home is to structure
your business appropriately. Detailing all costs involved
in getting your day care open is vital so that there are
no surprises, from research phase to supplies to actually
opening the doors. Many people also include the expected
continual expenses that are associated with operating a
daycare in the home on a consistent basis. These are the
unavoidable and necessary running costs and will include
utility bills, equipment, food costs and wages (because
even it is only you, you still need to pay yourself).

Every lender will want to see you put your money where your
mouth is so you will need to be prepared to invest a
certain percentage of your own funds in your day care
business. This will make lenders more likely to
provide you with the money that you are requesting for your
new child care business. Remember, from the financial
institutions point of view you are a huge risk, many new
businesses fail every year so if you believe enough, and
have committed to saving towards opening your day care then
they will be more likely to entertain your application.
Essentially if you are willing to make the commitment of
investing your own money in your day care business then a
lender is going to be more willing to provide you with the
funds you request.

Finally, another option to consider when seeking financing
for your day care business is to offer some form of
collateral.  This is a huge and risky step and requires a
lot of consideration and professional advice.  You will
need to be positive that you want to start your child care
business and confident in your ability to operate it before
you consider handing anything over as collateral.  This is
critical as many of these items are extremely valuable such
as property and vehicles.  However, lenders will tend to be
more comfortable providing finance when collateral is in
place.  Do your research, be sure and be certain before
making any critical decisions.

 

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January 16, 2008

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