Sponsors (4)
The bill expands nonprofit child care providers' access to SBA-backed financing and strengthens safety and oversight, but places limits on large loans, adds administrative compliance obligations, and restricts use of funds for religious activities, which may reduce access or complicate financing for some providers.
Nonprofit child care providers can access SBA 7(a), 504, and Title V financing and participate in deferred/guaranteed loans, increasing availability of affordable capital for facility improvements and operations.
Employees and volunteers at covered providers must undergo criminal background checks, which improves safety protections for children in care.
Nonprofit providers cannot be denied eligibility solely because of association with First Amendment–protected entities, protecting expressive associations and reducing risk of discrimination based on speech or expressive activity.
Loans and financings over $500,000 require third‑party guarantees and the SBA is precluded from direct lending, which may limit or slow access to large-capital financing for providers that cannot secure guarantors or if participating lenders decline or impose stricter terms.
New certification requirements, nondiscrimination rules (even with federal exemptions), state licensing, SBA size standards, and background‑check rules create administrative burdens and potential legal exposure that small providers may struggle to meet.
Prohibiting the use of loan proceeds for religious activities forces faith‑based providers to segregate funds or forgo certain faith-based programs, complicating financing use for religious organizations.
Based on analysis of 2 sections of legislative text.
Treats certain nonprofit child care providers as eligible small businesses for SBA 7(a) and 504 loans with lender-route limits, a >$500K guarantee rule, compliance checks, and annual SBA reporting.
Introduced January 28, 2025 by Jacklyn Sheryl Rosen · Last progress January 28, 2025
Creates a new statutory category for certain nonprofit child care providers and makes them eligible for SBA 7(a) loans and 504 program financings by treating them as small business concerns, subject to SBA size rules and state child-care licensing. Loans and financings to these providers must be made only through participating lenders on a deferred/guaranteed basis (no SBA direct lending or immediate participation); loans above $500,000 require a third-party guarantee while loans $500,000 or less do not. The legislation also protects eligibility against denial based on association with entities engaged in First Amendment–protected activities, bars use of loan proceeds for religious activities that are First Amendment–protected, and directs the SBA to report to Congress within one year and annually thereafter on counts and dollar amounts of 7(a) and 504/title V assistance to these providers.