14 May BPC Applauds Sens. Joni Ernst and Jacky Rosen, Reps. Susie Lee and Pete Stauber for Supporting Child Care Businesses in Children

BPC Action commends Reps. Susie Lee (D-NV) and Pete Stauber (R-MN), and Sens. Joni Ernst
(R-IA) and Jacky Rosen (D-NV), for their introduction of the Small Business Child Care
Investment Act. This bipartisan legislation would allow qualified non-profit child care providers
to participate in the same SBA loan programs as for-profit providers, recognizing all child care
businesses as equal contributors to the child care market and the broader economy.

Across the country, a shortage of child care businesses leaves many families struggling to find a provider in their community that fits their needs, their work schedule, and their budget. Providing child care is an expensive business, and the number of child care providers has been decreasing over the last several years.

Like any company, starting a child care business comes with significant start-up and maintenance costs, especially to ensure that the program’s facility meets the health and safety requirements to serve young children. With limited ability to participate in SBA loan programs, non-profit providers are at a significant disadvantage to opening and operating a business. This challenge was evidenced with the Paycheck Protection Program: despite all child care providers being eligible, recipients were almost entirely for-profit businesses and were more likely to be for-profit than the overall industry. Just 10 percent of child care recipients reported non-profit status in 2020, lower than the industry makeup in which about 23 percent are non-profit businesses.

By allowing access to SBA loan programs, this bipartisan legislation will help ensure that all child care providers are able to establish and operate a successful business, better serve children and families, and ultimately have a positive impact on the broader economy. We commend Reps. Lee and Stauber for introducing this legislation and are pleased to see them working in a bipartisan manner to improve the child care market and increase the supply of quality, affordable child care.

“The Covid-19 pandemic has continued to highlight the fragile state of child care businesses. This bipartisan legislation will help ensure that all child care providers are able to establish and operate a successful business, better serve children and families, and ultimately have a positive impact on the broader economy,” said Linda Smith, director of the early childhood initiative at Bipartisan Policy Center. “We commend Reps. Susie Lee and Pete Stauber for reintroducing this legislation and are pleased to see them working in a bipartisan manner to improve the child care market.”