Sponsors (2)
The bill helps nonprofit child-care providers access federal SBA financing and strengthens child-safety checks and free-association protections, but larger loans may remain hard to obtain and the lending process and new compliance/reporting rules could add delays and administrative costs.
Nonprofit child-care providers (small-business owners and nonprofits) gain access to SBA 7(a) and 504 loans, making it easier to obtain capital to expand or upgrade facilities.
Parents and children could see increased child-care capacity and improved quality if providers use the new financing to expand services or upgrade facilities.
Children and families benefit from a federal criminal background check requirement for employees and regular volunteers, which promotes child safety.
Small nonprofit providers seeking loans over $500,000 may face limited access because those loans require a third‑party guarantee, increasing the practical difficulty of obtaining larger capital amounts.
Providers may experience slower or more complex financing because the SBA is barred from making direct or immediate participation loans, so lenders and intermediaries must be used.
Small providers face added compliance costs from a required nondiscrimination certification, which could be an administrative burden for understaffed organizations.
Based on analysis of 2 sections of legislative text.
Qualifying nonprofit child care providers are treated as small businesses for SBA 7(a) and 504 loans, with eligibility rules, lending procedures, guarantee limits, and annual SBA reporting.
Introduced January 15, 2026 by Susie Lee · Last progress January 15, 2026
Creates a new legal category of "covered nonprofit child care provider" and treats qualifying nonprofit child care programs as small business concerns for purposes of SBA 7(a) loans and Title V (504) financings. It sets eligibility rules (licensing, 501(c)(3) status, primary child-care mission, SBA size limits, criminal background checks, nondiscrimination certification), requires loans to be made through cooperative arrangements with banks/CDC/financial institutions on a deferred participation basis, restricts direct SBA lending or immediate participation, and requires guarantees for loans/financings over $500,000. The SBA must report to Congress within one year and annually thereafter on counts and amounts of these loans and financings.