Determining Your Startup Costs
Before you start searching for government grants, we recommend determining your startup costs first, so you have a clear understanding of how much funding you will need. This will help you search for grants that are more likely to meet your needs since the amount of money available will vary depending on the grant.
When you are determining your startup costs, it is best to include all your expenses needed for the first 6 months of your operating your business. This will give your business time to start growing your client base and earning income. Once youve reached 6 months, a lot of the startup type expenses will be paid for and your expenses will be consistent.
Some of the startup costs you want to plan on in your budget include your business license, any building permits you will need, business insurance, enough toys to get your business started, safety equipment, educational material and cleaning supplies.
Another benefit of determining your startup costs is you are less likely to run into surprises down the road. By having a startup budget, you will have a clear understanding of what costs you can expect to have during the beginning phases of your business.
Searching for Grants You Qualify For
The first step in funding your new childcare business with government grants is finding the grants that your business may qualify for. When searching on grants.gov, you will see an extensive database that is full of grants available through various government agencies.
Federal Aid Is Propping Up Child Care It Isn’t A Long
This story has been updated to clarify the possible impact of a package of child care proposals in Utah.
Federal COVID-19 relief dollars for child care providers will continue to flow through the states this year, cheered by both Republican and Democratic governors who say parents need affordable child care to get back to work.
But child care providers and advocates warn that the federal money, which expires in 2024, wont solve the industrys fundamental, long-term challenge: how to provide quality services and pay workers a competitive wage while keeping prices affordable.
Federal and state aid must continue, said Karen DeVos, owner of a child care business in rural Ada, Minnesota. We cant just say, Were nearing the end of the pandemic, or, OK, the pandemic is now the norm: Figure it out.
While some states have started to spend the $39 billion for child care authorized by the American Rescue Plan Act, others havent. Some governors and state lawmakers are starting to announce their plans now, from setting aside grants for startup child care businesses to offering larger grants to businesses that can use the money to give workers a bonus.
If we want to get the participation rate up, is something we’re going to have to address, he said.
The History Of Child Care In The Us
by Sonya Michel, Ph.D., University of Maryland
In the United States today, most mothers of preschool and school age children are employed outside the home. American mothers have invented many ways to care for their children while they work. Native Americans strapped newborns to cradle boards or carried them in woven slings Colonial women placed small children in standing stools or go-gins to prevent them from falling into the fireplace. Pioneers on the Midwestern plains laid infants in wooden boxes fastened to the beams of their plows. Southern dirt farmers tethered their runabouts to pegs driven into the soil at the edge of their fields. White southern planters wives watched African American boys and girls playing in the kitchen yard while their mothers toiled in the cotton fields. African American mothers sang white babies to sleep while their own little ones comforted themselves. Migrant laborers shaded infants in baby tents set in the midst of beet fields. Cannery workers put children to work beside them stringing beans and shelling peas. Shellfish processors sent toddlers to play on the docks, warning them not to go near the water.
Mothers have left babies dozing in carriages parked outside movie palaces, at department store day nurseries, and parking services in bowling alleys and shopping malls. Some mothers have placed their children in the care of others and never come back.
The Beginnings of Child Care Reform
The U.S. Childrens Bureau
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States Finalize Spending Plans
Governors of both parties have in recent months proposed new spending on child care programs.
New York Gov. Kathy Hochul, a Democrat, said she wants to allow families who earn up to 225% of the federal poverty line to access child care subsidiesup from the states current 200% limitand she wants to spend $75 million to boost child care worker wages. Colorado Democratic Gov. Jared Polis wants to spend $30 million to renovate state buildings, including higher education institutions, to add child care facilities. The facilities would be open to the public and run by private providers.
South Dakota Gov. Kristi Noem, a Republican, blasted the federal Build Back Better bill in her annual budget address but touted her plans to distribute her states $100 million allocation of American Rescue Plan Act aid. The money will be spent to help new and existing child care businesses, help employers open facilities for employees, and fund scholarships for child care workers, she said.
Many of the recent proposals will likely be funded by American Rescue Plan Act fundseven if governors arent making that explicit, said Anne Hedgepeth, deputy chief of policy for Child Care Aware of America, a nonprofit that works with child care resource and referral agencies and advocates for child care policies.
You see relief driving it, she said.
The Program: Childcare And Education Savings Accounts
The politics of increased federal funding for childcare depend not only on data Ive presented above on need and the availability of budget offsets from the charitable deduction, but also on how an increased subsidy would be delivered to families. Further, the outlines of a delivery vehicle are required in order to estimate costs. There are several ways that a federal subsidy for childcare might be accomplished. Three broad categories are: tax credits, grants to states, and savings accounts.
The tax vehicle would provide for increased deductibility or credits for childcare expenses, including perhaps refundable tax credits such that a family that has accrued childcare expenses but whose taxes would be reduced below zero with a childcare credit would receive a refund for the difference. There are several problems with a tax credit vehicle, as I describe subsequently. A critical one is that it delivers benefits to parents once a year in connection with a tax return whereas the costs for childcare are due and payable when they are being received. The childcare provider needs to be paid at the end of the week or beginning of the month. A tax credit the parent receives in April is mistimed for families that live from paycheck to paycheck.
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Program Eligibility And Funding Conditions
Resources for Inclusion Support in Early Learning Settings includes a series ofwraparound supports available to early learning and child care programs to support the inclusion of all children with varying abilities. R.I.S.E. includes training and other supports, such as coaching, to build the confidence of early learning and child care professionals as they support inclusive classrooms.
R.I.S.E. encompasses all services and supports available from York Region Childrens Services, including:
- Capacity Building Support Identification Tool
- Development of a classroom plan
- Classroom consultations
R.I.S.E. Inclusion series modules
The following topics are covered in the modules:
How to access the modules
Rate Incentive Funding
- Classroom consultations
Grants For Adult Day Care
Grants for Adult Day Care These days, more and more people need adult day care services, since there are also more and more families which have its family members extremely busy with their full-time job in order to maintain the welfare of the whole family. Meanwhile, other family members are also busy with their school so these people simply dont have enough time to actually be with their senior member of the family, especially during daytime.
The number of adult daycare is increasing every year, with more than 5600 programs identified in 2014. The number increases more than 1,000 in just 4 years . Even with the increase in number, the number of daycare available for seniors is still lacking, proven by the waiting list found in nearly a third of the total number of programs or facilities. With more and more families has all of its members working full time, there will be more demand for these services.
Therefore, we can conclude that theres still a need for adult day care. If you are interested to help out your community, you can always try to start an adult day care service in your area. After all, the demand for daytime care for senior citizen will only increase each year, as we have shown you from the figures above.
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Will Child Care Be There When States Reopen
Closures may make it harder for parents to return to work.
Ultimately, they say, the federal government needs to step in. States cannot do it alone. This problem is so massive that federal intervention is needed, said Clare Sanford, government relations chair of the Minnesota Child Care Association, an advocacy group for child care centers based in St. Louis Park, Minnesota.
Democrats in Congress have included new child care subsidies for low- and middle-income families in their sprawling social spending bill, the Build Back Better Act. States would administer the funds and eventually contribute 10% of the child care assistance costs.
That legislation is currently stalled, however. Republicans and moderate Democrats oppose its price tag and many of its provisions. Republicans say the child care portion of the bill would increase child care costs and hurt faith-based providers.
With future funding uncertain, child care providers worry about what will happen when federal relief dollars dry up. DeVos is currently using a federal grant provided monthly by Minnesotas human services agency to pay her employees $300-$700 monthly bonuses.
She cant afford the bonuses without the grants, she said. My fear is, when those end, what happens?
What Is The Child Care Stabilization Grant
The Child Care Stabilization Grant is a $700 million investment in child care providers across Michigan. The Stabilization Grant is a non-competitive grant for child care providers to help stabilize operations and support the health and safety of children and staff.
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Child And Adult Care Food Program
The Child and Adult Care Food Program are funded by the USDA Food and Nutrition Service. However, this grant is distributed on a state level. The Office of Child Care, an extension of the United States Department of Health and Human Services, states that the CACFP is backed by the Supplemental Nutritional Assistance Program . With this grant, daycare centers are reimbursed for the snacks and nutritional meals they provide to children whose families do not have sufficient income.
Feeding 4.2 million children per day, this program aims to provide proper nutrition to those who need it most. Benefits.gov states that in-home or traditional daycare centers can be reimbursed for providing up to two meals per day to qualifying children and adults. Public or private nonprofit daycare centers, after-hours school programs, and licensed institutions that provide child care services are all eligible to participate in this program. You can obtain more information on this grant here.
Which Training Programs Are Eligible
To be eligible for funding, the course must be provided by an accredited post-secondary institution that satisfies the requirements of the Early Learning and Child Care Board.
Approved courses being offered between September 1, 2022 and March 31, 2023 are eligible for this round of funding.
The following courses are eligible:
- Holland College Accelerated ECCE Diploma
- Holland College Accelerated ECCE Certificate
- Holland College courses recognized towards meeting the requirement for ECE 1:
- Curriculum 1: Play is Learning
- Preschool Development
- Many other courses are eligible as well. To confirm eligibility of other courses, please contact Monique McClean, Registrar to the Early Learning and Child Care Board at or 902-368-6518.
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Centres At Half Capacity
Low enrolment is one of the many challenges child-care providers face as some parents opt to keep children home due to pandemic-related fears or financial barriers.
According to the province, more than 80 per cent of licensed child-care spaces were filled before the pandemic, but as of September 11, child-care centre capacity was at 52 per cent.
Great Expectations Childcare, on Calgary Trail in south Edmonton, has space for 34 kids but only five are currently enrolled.
Owner Nadia Koziak said the pandemic delayed the licensing process and health safety approval, so her new business was not licensed until August 4.
“My landlord’s pretty good but I’m going to have to foot the bill at some point here,” she said.
Some centres could care for more kids, but COVID-19 guidelines, which cap child-care cohorts at 30, mean hiring more staff to be able to do so.
Campbell said this currently is not feasible for her company, but she would love to direct federal funding to staffing so her centre could return to normal operations.
What Costs Can This Grant Cover
100% of the tuition cost for eligible courses, up to $2500 per applicant annually.
The following costs are not eligible for funding: course fees which are above the cost of the course, such as student fees, facility fees or other non-course related fees text books course materials salary travel accommodations meals professional dues membership fees and exams without a delivered learning component.
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Nursery School Annual Operating Grant
The Nursery School Annual Operating Grant provides a level of operational support dependent on the type of child care services offered.
Funded nursery schools are required to submit an application to receive their operating grant annually within one month after their fiscal year-end. The Nursery School Annual Operating Grant application form is located on Child Care Online.
New or unfunded nursery schools will be advised if they become eligible for operating grant funding.
- Operating grants are based on the number of licensed spaces, the number of sessions offered, the utilization of all spaces as well as the actual months and days of service.
- Operating grants are issued in installments, four times per year .
- The Board of Directors is the legal entity and authority for a not for profit child care centre. It is accountable for the proper conduct of the centreâs business and for all aspects of the centreâs programs, staff and funds, including oversite and approval of the budget.
- Financial reporting to the Early Learning and Child Care Program is a requirement for continued eligibility of receiving grants. The names and attendance of all children must be reported by the Centre Director or designate on the Facility Child Attendance Report. The Facility Child Attendance Report must be submitted for each designated four week period and should be submitted no later than two weeks after the end of the reporting period.
Waiting To Hear Results
Applying and receiving government grants can be a lengthy process. Once you have submitted all of your information, you will also need to wait to hear back on the results for each grant you apply for. This can take anywhere from a couple of weeks to a few months.
One great benefit of grants.gov is you have the ability to track the status of the grants you apply for easily on the website. You dont need to call a government office and wait on hold to check the status of your grants. As long as you know your login credentials, you can easily check the status online, even from your smartphone.
Since it can take a while to hear back about grants, this option is best for those who have time available to wait to receive the funds. If you need funds right away for your childcare business, you may want to consider other finance options .
When it comes to starting your daycare business with government grants, it can be a time-consuming process, but it can be an incredible tool for financing your business. The grants.gov website makes the process easy to follow and simple, even for those who may not be the most tech-savvy.
Before jumping to business loans automatically when starting your business, we do recommend at least seeing what grants may be available for your business. If you dont look into business grants, you may be missing out on free money.
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What Types Of Loans Are Available To Me If I Want To Open A Daycare Center
There are several small business loans for which you can apply. According to the website Boefly, you can apply for a Small Business Association loan. These loans usually have an interest rate between 4.25 and 8.75 percent. There are also asset-based and unsecured business lines of credit. Two other possible sources of funding for your daycare are seller-carry financing and merchant cash advances.