The Small Business Administration and Home-Based Child Care Providers: Expanding Participation

Brief

The Small Business Administration and Home-Based Child Care Providers: Expanding Participation

Abstract

Home-based child care (HBCC) providers support children’s development and help parents work. In 2019, slightly more than 1 million paid or listed home-based providers cared for 4.3 million children younger than 13. Despite their important role, however, many of these providers appear unlikely to participate in or benefit from public supports designed to help small businesses thrive, such as those from the Small Business Administration (SBA). This stems in part from the reality that HBCC providers are extremely small and have characteristics unlike other businesses, and in part from the reality that SBA supports are not well designed for sole proprietors and other microbusinesses. However, SBA supports could be more available and relevant to HBCC providers, particularly through technical assistance (TA) coupled with resources and in some cases supports for microloans to make them less risky for lenders. Such supports would be particularly effective if they were paired with incentives and resources to support strong partnerships between local financial organizations and intermediaries that are experts on the unique realities HBCC providers face. These insights also are relevant for other financial institutions that may have the potential to support HBCC providers.

This brief is part a series focused on supporting greater home-based child care provider participation in various federal programs or service systems.

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