Supporting Quality Child Care in Our Community

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The Child Care Planning Council of Yuba & Sutter Counties encourages and promotes quality standards of care. The Council offers child care providers the following networks for more information.

Building Child Care 

Building Child Care (BCC), funded by the California Department of Education, is a collaboration of organizations designed to help child care providers access public and private sector financing for child care facilities. The four collaborative partners on this project have combined their experience, resources, and expertise to build a clearinghouse of information and assistance for developing and financing child care facilities. 

To access the informational resources and publications, and to ask questions about the process of acquiring, building, renovating, or expanding child care facilities you can visit the web site at: www.buildingchildcare.org 

Technical Assistance

   1.     Demographic and Business Information

The Yuba-Sutter Economic Development Corporation provides a variety of demographic and business trend information free of charge to businesses. www.ysedc.org 

   2.    Site Location Assistance

The Yuba-Sutter Economic Development Corporation provides direct assistance to businesses that want to identify and locate sites in Sutter County. The Corporation also provides assistance to expanding companies. The Corporation provides liaison assistance with permitting, financing and labor force needs.

   3.    Small Business Assistance

           - Service Corps of Retired Executives, SCORE www.score.org

           - Small Business Development Center, SBDC http://commerce.ca.gov/small-business/sbdc-locations.html

The SBDC provides a variety of services to start-up and established businesses. Assistance is offered free or at low cost, tailored to the clients needs.

     4.    Labor and Workforce Development

            a.  Employment Development Department, Labor Market    Information Division. www.calmis.ca.gov

                 -Provides assistance to employees with analysis of employment trends, skills/qualifications, wages and salaries.

             b. Yuba and Sutter County One Stop Business Centers.

                  Sutter County- www.1stop2work.com/sutter.htm

                   Yuba County- www.1stop2work.com/yuba.htm

The One Stop Centers can provide a variety of services such as applicant screening and job matching, job listings and announcements, customized recruitment, provide interview facilities and direct placement.

Financial Assistance

Federal Funding Sources and Programs

Grants:

Small Business Administration Loans

A. SBA Micro-Loan Program www.sba.gov/financing/frmicro.html  

This program is available to established and start-up businesses that have less than 100 employees an less than $5 million in sales. It provides loans in the range of $1000-$25,000 at a fixed rate. The loans can be used for working capital, inventory, furnishings, real property acquisitions, etc. They cannot be used for debt repayment. 

B. Minority Pre-qualification Loan Program and Women's   Pre-qualification Loan Program. www.sba.gov/business_finances/prequal/all.html 

Enables SBA to pre-qualify loan guarantees for women and minority-owned businesses before approaching lenders. The women's program uses only non-profit intermediaries to assist in loan packaging and securing before applying for guarantees. The minority program allows for-profit intermediaries as well. 

C. SBA 7(a) Loan Program www.sba.gov/financing/fr7aloan.html 

This program is designed to assist small businesses by providing working capital to meet both short and long-term financing needs. Funds can be used to purchase inventory, supplies, machinery, and equipment; consolidate debt; and pay for construction, conversion, rehabilitation, or acquisition of existing businesses. Private lenders provide the loans. The Small Business Administration (SBA) will guarantee up to 90% of loans up to $155,000, and 85% of loans over $155,000. Loan sizes are $50,000-1,000.00. The lending institution sets the rate, and uses the assets purchased with loan proceeds as collateral. The small business may be required to inject 10-25% into the project.

D. SBA 504 Loan Program www.sba.gov/financing/frcdc504.html 

This program is designed to assist small businesses by providing long-term, fixed asset financing. Funds can be used for land acquisition, construction or purchase of existing building, site improvements, renovations, restoration, and purchase of major equipment. Private lenders provide 50% of project cost, SBA provides up to 40%. Project size ranges from $350.000 to 4 million.     

E. SBA Low DOC Loan Program www.sba.gov/financing/frlowdoc.html 

This program is designed to streamline the lending process for small loans (up to $100,000) provided by the SBA. Loans under this program are designed to assist small businesses by providing working capital to meet both short and long-term financing needs. Funds can be used to purchase inventory, supplies, machinery, and equipment; consolidate debt; and pay for construction, conversion, rehabilitation, or acquisition of existing businesses. Private lenders provide the loan. SBA will guarantee up to 90% or it. The lending institution sets the rate, and uses the assets purchased with loan proceeds as collateral. The small business may be required to inject 10-25% into the project. 

F. SBA CAPlines Loan Program www.sba.gov/financing/frcaplines.html 

CAPLines is the umbrella program under which the SBA helps small businesses meet their short-term and cyclical working capital needs. A CAPLines loan can be for almost any dollar amount. There are five loan programs for small businesses under the CAPLines umbrella:

Seasonal line: advances against anticipated inventory and accounts receivable help during peak seasons;

Contract line: finances the direct labor and material cost associated with performing assignable contracts;

Builder's line: can finance direct labor and material costs for small contractors or builders. The building project serves as the collateral;

Standard asset-based line: a revolving line of credit for businesses unable to meet credit standards associated with long-term credit. It provides financing for cyclical growth, recurring and/or short-term needs. Businesses continually draw from this line of credit. Repayment comes from converting short-term assets into cash, which is remitted to the lender;

Small asset-based line: this is a revolving line of credit up to $200,000. It operates like a standard asset-based line except that some of the stricter servicing requirements are waived, providing the business can show repayment ability from cash flow for the full amount. 

These loans may be used for most business purposes. Each line of credit has a maturity of up to five years. Funds can be used as needed throughout the term of the loan to purchase assets, as long as sufficient time is allowed to convert the assets into cash at maturity. The SBA can guaranty up to 80% of loans of $100,000 or less, and up to 75% of loans about $100,000.  Holders of at least 20% ownership in the business are generally required to guaranty the loan. 

State Funding Sources

California Loan Guarantee Program www.commerce.ca.gov/business/small/financial 

The California Loan Guarantee Program enables a small business to obtain a term loan or line of credit when it cannot otherwise qualify for a loan. The Office of Small Business administers the program with the primary objective of creating and retaining jobs, as well as providing a service to small businesses (including women, minority, and disable owned). The program provides a lender with the necessary security, in the form of a guarantee, for the lender to approve a loan or line of credit. The guarantees are issued on behalf of the state by any of eight non-profit corporations throughout California. These offices are called Small Business Financial Development Corporations (FDCs). Some FDCs offer direct loans up to $25,000.  This program is not related to any SBA program. 

Financing for Child Care Facilities www.hcd.ca.gov/ca/ccffp 

Facility financing through direct loans or loan guarantees are now available for licensed child care centers and licensed family day care homes serving more than six children.

Each facility and project must:

Primarily serve children from low-income families; and 

Create or preserve child care spaces

Additionally, each project must meet one of the following: 

Primarily serve any combination of infant care, after school care, non-traditional hours care, or serve special needs children; or

Replace spaces lost to classroom size reductions; or

Primarily serve children from "Welfare to Work"  families; or

You are a current California Department of Education contract.

Sudden and Severe Economic Dislocation Revolving Loan Fund www.ceres.ca.gov/cert/grants/tcssed.html 

The SSED loan program is designed to be used in conjunction with private lending and investment sources to complete projects which would not normally qualify for conventional financing. Loan proceeds may be used for land building (excluding construction), machinery and equipment, and working capital. Businesses may borrow form $25,000 to $500,000 and loan terms may go up to 20 years, depending on the use of the loan funds. Lower than market interest rates, flexible repayment terms and subordinated collateral positions provide a unique opportunity to assist loan applicants in structuring projects which will create or retain permanent employment while responding to local and statewide development strategies.

Local Funding Sources

A) Yuba-Sutter Enterprise Zone

The Yuba-Sutter EDC currently manages a joint enterprise zone in both Yuba and Sutter Counties. The Enterprise Zone can provide the following benefits:

  1. Businesses can earn up to $19,000 per employee in state tax credit.

  2. Sales tax credits up to $1.3 million annually on machinery and parts purchased by Enterprise Zone businesses. 

  3. Up-front expensing of specific depreciable property as an incentive under certain conditions.

  4. Lenders to Zone businesses receive interest income, tax free.

  5. Losses incurred by Enterprise Zone businesses may be carried over to years in which taxable income is earned. 

  6. Unused tax credits can be applied to future tax years.

  7. Enterprise Zone businesses receive preference points on state of California contracts. 

  8. Other benefits and incentives designed specifically for Yuba and Sutter counties as part of the Enterprise Zone. 

Revolving Loan Fund Program (RLF)

This program provides low cost financing to businesses in the region. The range of loans is from $25,000 to $150,000. The RLF funds are designed to fill gaps in financing and are tailored to the capital needs of the individual's business. The eligible use of the funds are: 

Working Capital

Furniture, Fixtures and Equipment

Inventory

Machinery

Yuba Sutter Intermediary Relending Program 

This program managed by the Yuba-Sutter Economic Development Corporation provides loans to businesses in the region. Eligible use of the funds are: 

  1. Business and industrial acquisitions when financial assistance will keep the business from closing prevent the loss of employment opportunities or provide expanded job opportunities.

  2. Business construction, conversion, enlargement repair, modernization or development.

  3. Purchase and development of land, easements, right-of-way, buildings, facilities, leases, or materials. 

  4. Purchase of equipment, leasehold improvements, machinery or supplies

  5. Transportation Services

  6. Working Capital

Private Funding Sources and Programs

A. Rural Venture Capital Network (RVCN)

The RVCN is a program that covers 15 Northern California counties to work toward expanding business with a variety of investment sources and funding mechanisms. The Tri-County EDC, consisting of Glenn, Tehama and Butte Counties, manages the fund as a type of venture capital program for economic development. The program could have advantages to local start-up and business expansions. 

B. California Economic Development Lending Initiative (CEDLI)

CEDLI is a multi-bank community development corporation established in 1995 to make loans to small businesses and community development organizations. CEDLI's mission is to create jobs by providing financing to projects that fall outside of normal bank lending practices.

C. Affordable Buildings for Children's Development (ABCD Fund)

The ABCD Fund enables child care centers in California to meet the costs of facilities development, and assists them with their long-term real estate financing needs.  The ABCD Fund is managed by the Low Income Investment Fund and is a component of California's ABCD Program, the comprehensive child care facilities financing system being launched in January 2003.

The ABC Fund offers financial products which together deliver capital to fully meet facilities development needs:

Planning grants ranging from $10,000 to $20,000 are available for early-stage project feasibility analysis.  Grants will cover expenses such as architectural and development consulting services, engineering analyses and other third-party work to determine project feasibility and/or to develop pro forma budgets and financing plans.

 

Predevelopment loans of up to $100,000 are designed to provide child care center operators or facilities developers the early-stage funding they need to undertake development projects and bring them to the point of starting construction.  These loans will support typical predevelopment costs, including Phase I and II environmental assessment, inspections, architectural and consultant services, permits, loan and legal fees, as well as acquisition costs in some cases.  The terms will include 3 percent deferred interest and repayment periods of up to 3 years.

 

Interest-only loans for acquisition, construction, rehab, etc. are designed to enable worthwhile projects to come to fruition.  These non-amortizing loans of up to $1 million are to provide capital on an interim basis until the project can be refinanced with a permanent loan.  The terms will include average interest rates of five percent with maximum interest rates of eight percent and repayment periods of up to three years.

 

Amortizing loans will provide long-term real estate financing for projects that have successfully completed the facilities development process.  These loans will have amortizations of up to 40 years, repayment periods of up to ten years, and average interest rates of five percent with maximum interest rates of eight percent.

The ABCD Fund also provides technical assistance during each phase of the development process.

For more information on the ABCD Fund, contact:

         Noni Ramos

         National Child Care Director

         Low Income Investment Fund

         (510) 893-3811 ext. 319

         nramos@liifund.org

         or click on the link http://www.lihf.org/family.html