What This Bill Does
The Small Business Child Care Investment Act would let qualifying nonprofit child care providers participate in certain Small Business Administration loan programs, including SBA section 7(a) loans and the Small Business Investment Act’s title V financing programs. To qualify, a provider must be a 501(c)(3), comply with state licensing and child-staff background check rules, meet SBA size standards, and certify it does not discriminate in business practices. The bill also bars SBA direct lending to these providers and requires loans over $500,000 to have a guarantee of timely payment from another person or entity. Finally, it would require the SBA to report to Congress each year on how many such loans were made and the amounts involved.
- Adds nonprofit child care providers to SBA section 7(a) loan eligibility as “small business concerns.”
- Extends similar eligibility to title V financing under the Small Business Investment Act of 1958.
- Requires loans over $500,000 to have a guarantee of timely payment; loans of $500,000 or less do not.
- Bars SBA direct lending or immediate participation; loans must be made with banks, CDCs, or other financial institutions on a deferred guaranteed basis.
- Requires annual SBA reports to Congress within 1 year of enactment and every year after.
Who This Bill Affects
For a nonprofit child care provider that meets the bill’s definition, this could create a new path to SBA-backed financing for expansions, facility upgrades, or operating capital, with special treatment for loans and financings under section 7(a) and title V. Smaller loans at or below $500,000 would not require a guarantee of timely payment, while larger ones would. For most other people, the bill has little direct effect except insofar as it could help expand child care capacity if eligible providers use the financing to open more slots.
See how this bill affects you — sign in for a personalized analysisCBO Cost Estimate
February 14, 2025CBO estimates that S. 273 would have no effect on direct spending or revenues over 2025-2035, with an estimated change in the deficit of $0. The bill would authorize nonprofit childcare providers to receive SBA-guaranteed loans and require SBA to report annually to the Congress; CBO expects the reporting costs to total less than $500,000 over 2025-2030, and any change in SBA loan costs would be insignificant. Detailed budget effects should be read in the linked CBO report.
Full CBO report →Who Supports & Opposes This
- Nonprofit child care providers These providers often need capital for buildings, equipment, and staffing just like other small businesses, but lack access to the same financing tools. Allowing them into SBA loan programs could help stabilize centers and expand child care availability.
- Working parents and families needing child care More affordable financing could help centers grow capacity or stay open, which may reduce waitlists and improve access to care for infants, preschoolers, and school-age children outside school hours.
- Community lenders and certified development companies The bill creates a defined financing pathway through participating lenders rather than direct federal lending, which can channel capital to a socially important sector without requiring the SBA to become the primary lender.
- Taxpayers concerned about federal credit risk Expanding SBA-backed lending to a new class of nonprofit borrowers could increase exposure if providers struggle to repay, especially for loans above $500,000 that depend on third-party guarantees.
- Some for-profit child care businesses Granting nonprofit providers access to SBA loan programs could be seen as creating an advantage for nonprofits that may already qualify for other public or philanthropic support, potentially affecting market competition.
- Organizations wary of federal conditions on nonprofits The bill’s restrictions on use of proceeds for religious activity and its certification requirements could be viewed as adding compliance burdens or limiting how some faith-affiliated providers operate.
Key Implications
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““a covered nonprofit child care provider shall be deemed to be a small business concern””
This is the core eligibility change. It places qualifying nonprofit child care centers into SBA lending programs that were previously reserved for small business concerns, giving them access to the same general financing framework.
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““shall obtain a guarantee of timely payment… for… more than $500,000””
Larger loans would require additional backing from another person or entity, which may make it harder for some providers to borrow substantial amounts, even if they qualify otherwise.
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““may not use the proceeds… for a religious activity””
Providers that are religiously affiliated could still qualify, but the borrowed money cannot be used for protected religious activity, creating a line between financing child care operations and financing religious functions.
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““shall submit to Congress a report… not later than 1 year… and annually thereafter””
Congress would get ongoing data on how many loans are made and how much financing flows to nonprofit child care providers, which could shape future oversight or changes to the program.
Latest Status
June 17, 2026
Committee on Small Business and Entrepreneurship. Hearings held.
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Ask AI about this billData sourced from api.congress.gov.