Reps. Susie Lee, Pete Stauber Introduce Bipartisan Child Care Expansion Bill

February 6, 2020

Washington, D.C. – U.S. Reps. Susie Lee (D-Nev.-03) and Pete Stauber (R-Minn.-08) introduced the bipartisan Small Business Child Care Investment Act, which would grant non-profit child care providers access to the same types of Small Business Administration (SBA) loans available to for-profit businesses.

Currently, non-profit child care providers only have access to the SBA Microloan Program, capped at $50,000. This bill expands access for non-profit providers to the larger and more flexible SBA loan programs that range up to $5.5 million and can be used for real estate, construction, remodeling, and other expenses critical to maintaining and expanding high-quality child care operations.

Original co-sponsors of the Small Business Child Care Investment Act include U.S. Reps. Abby Finkenauer (D-Iowa-01), Jim Hagedorn (R-Minn.-01), Katie Porter (D-Calif.-45), Troy Balderson (R-Ohio-12), Cindy Axne (D-Iowa-03), John Moolenaar (R-Mich.-04), Nita Lowey (D-N.Y.-17), Pete King (R-N.Y.-02), Susan Wild (D-Pa.-07), and Van Taylor (R-Texas-03).

The following groups have announced their support of the bipartisan Small Business Child Care Investment Act: National Head Start Association (NHSA), Bipartisan Policy Center Action, Child Care Aware of America, First Five Years Fund (FFYF), Save the Children, Save the Children Action Network (SCAN), Zero to Three, First Focus Campaign for Children, National Association for the Education of Young Children (NAEYC), Children's Advocacy Alliance Nevada (CAANV), Guinn Center for Policy Priorities Nevada.

"Over half of American families lack reasonable access to child care," said Rep. Lee. "Two out of every three children in Nevada live in a household where their parents are working full-time, but because most families don't have nearly enough affordable child care options, juggling a full-time job and caring for your kids becomes almost impossible. Not only does the Small Business Child Care Investment Act expand child care access for families on a budget, it helps child care providers expand their businesses, hire more employees, and invest back into their local economies. Republicans and Democrats in Congress and throughout the country agree that we need to expand early education and child care opportunities, and that's why Congressman Stauber and I came together across party lines to put the needs of American families first."

"With more and more parents choosing to dually work and raise a family, child care deserts are hurting families across the nation now more than ever," said Rep. Stauber. "Those in rural America are particularly impacted by these deserts, and we cannot continue to punish those who choose to live in our rural communities. The Small Business Child Care Investment Act will allow non-profit child care providers to help our communities that are suffering by giving them access to SBA loans. These loans will go a long way in keeping the doors open at child care centers and providing for families that want to participate in the workforce."

"Access to quality and affordable child care is a critical need all over my district and our state," said Rep. Finkenauer. "We must keep working to improve every tool available to increase access. Too many Iowa parents are forced to make the choice to hold back their careers—and their family's economic opportunity—simply because there is no space left at the child care centers in their community. While some families may be lucky enough to have extended family to help provide care, it's not right to put folks in a position where that's the only option."

"For too long parents in southern Minnesota and across America have been burdened with high costs of preschools, long waitlists and few options for child care services," said Rep. Hagedorn. "This bill provides operators access to loan guarantee programs at the Small Business Administration, which reduces barriers to access capital thus helping parents secure more affordable, timely care for their children no matter where they live."

"I'm the first single mom of young kids elected to Congress, so I know firsthand that we have a child care crisis in this country," said Rep. Porter. "Too many working parents aren't able to fully participate in our economy because of lack of access to affordable child care, and non-profit providers can help bridge this gap. I'm proud to help introduce this bipartisan bill that takes another step towards getting working families the child care they need."

"Across this country, we are experiencing a child care crisis. For example, in Iowa, new parents are paying on average $10,400 for care on top of a lack of child care providers. That why I'm working to find ways to expand access and lower the costs of child care for families" said Rep. Axne. "We need to encourage new child care providers to start up a business that will have direct benefits on our communities. By allowing our local non-profits to utilize these SBA loans, we can ensure all child care providers can access support to grow their operations — creating jobs and allowing more families to utilize their care."

"We owe it to our nonprofit child care providers to recognize them also as small business leaders," said Rep. Lowey. "The Small Business Child Care Investment Act's expansion of eligibility for Small Business Administration (SBA) 7(a) and SBA 504/CDC loans to include nonprofit child care providers would help increase the supply of high-quality child care slots to better meet the need for affordable, accessible, and high-quality early childhood education. Meaningful access for nonprofit child care providers to capital improvements that support a young child's healthy development is an investment that would benefit children, families, and our economy."

"When my kids were growing up, I saw firsthand the critical need for child care across our communities, especially for working families," said Rep. Wild. "If we are going to address the massive shortages of child care in this country, then we are going to have to ensure that it easier for child care centers to operate and expand. I am proud to work alongside a group of bipartisan lawmakers to increase access to quality child care in every community across this country. This legislation is a prime example of how we can work together on behalf of middle class families everywhere."

"Finding affordable, quality child care is challenging for Americans balancing families and their careers," said Rep. Taylor. "By allowing non-profit child care providers to apply for Small Business Administration loans, we can create local jobs while improving child care options and reducing the cost of care for hard working families across the country."

"This bill gets at a real problem in Nevada, the access to high quality and affordable child care options for our hard-working families," said Dr. Nancy E. Brune, executive director at the Guinn Center for Policy Priorities in Nevada. "By opening new avenues for access to capital, this bill offers a common sense solution that can expand high quality and affordable child care options for Nevada."

"In Nevada, over 65 percent of children age zero through five live in households where all parents work, representing over 136,000 kids," said Denise Tanata, executive director at the Children's Advocacy Alliance of Nevada. "However, Nevada's licensed early childhood capacity only meets the needs of about 35% of those kids. Our nonprofit providers can be a viable solution to increasing capacity. This bill will provide those nonprofit organizations an opportunity to access the funds necessary to purchase, remodel and/or expand operations. Increasing capacity of licensed child care helps kids enter school ready to learn and keeps them safe so their parents can work."

"The Head Start community applauds the bipartisan work of Representatives Lee and Stauber to aid non-profit child development centers in improving the quality of the learning environments where our young children grow," said Yasmina Vinci, executive director at the National Head Start Association. "By increasing access to low-interest financing options, this bill would help many Head Start programs in making the infrastructure investments necessary to enhance the safety and quality of their facilities, and provide a little extra support to at-risk children and their families as they navigate their paths to success."

"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," said Linda Smith, director of the Early Childhood Initiative at Bipartisan Policy Center Action. "We commend Reps. Susie Lee and Pete 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."

"Child Care Aware^® of America applauds Representative Lee and Representative Stauber for introducing the bipartisan Small Business Child Care Investment Act and finding a new way to support nonprofit child care providers in maintaining high-quality child care," said Ami Gadhia, chief of policy, research, and programs at Child Care Aware^® of America. "Across the country, child care providers are struggling to find the financial resources to improve or maintain the quality of their programs, resulting in an undersupply of high-quality child care for working families. Making SBA funds available to child care providers will help these hard-working, under-compensated and unrecognized providers do what they do best: provide high-quality care to America's children."

"Non-profit child care providers offer a critical service to families across the country, but many often face barriers that prevent them from establishing or expanding care that has proven to have a positive impact on a young child's development and future success in and out of the classroom," said Sarah Rittling, executive director at the First Five Years Fund. "It is important, now more than ever, that we find innovative solutions that ensure these programs are available to all families. We are pleased to see Congresswoman Lee and Congressman Stauber working together on a bipartisan proposal that would expand access to affordable, quality child care across the country by allowing non-profit providers to access the same financial resources available to for-profit providers."

"We applaud Representatives Lee and Stauber for prioritizing children and families by introducing this important bipartisan bill," said Kimberly Robson, senior director of state and national campaigns at the Save the Children Action Network (SCAN). "This legislation provides a simple solution to the child care crisis, one of the most urgent issues facing today's children, our nation's future. In providing non-profit child care providers the opportunity to access SBA loans, this bill simultaneously addresses the nation-wide child care shortage and boosts the economy, all while ensuring the brightest future for our children. An investment in children is a direct investment in our future. Nothing is more important. This is why we are proud to support this piece of legislation."

"First Focus Campaign for Children is pleased to support the Small Business Child Care Investment Act, a bipartisan bill that aims to address the lack of affordable, high-quality child care available to families in this country," said Bruce Lesley, president at First Focus on Children. "This legislative proposal offers a simple change to ensure that qualified nonprofit child care providers can access the same types of SBA loans as for-profit entities. The need for high-quality child care remains high. This initiative will help nonprofits improve their businesses by expanding access to resources and will benefit communities by increasing access to high-quality, affordable child care and creating well-paying jobs."

"Our country is moving toward necessary investments in the education and compensation of early childhood educators," said Rhian Evans Allvin, CEO at the National Association for the Education of Young Children (NAEYC). "This common-sense, bipartisan legislation takes an important step forward in support of educators working in non-profit child care settings by ensuring that they can access the same small business loans as their for-profit counterparts. With high-quality child care out of reach for too many families, NAEYC is proud to support all efforts to expand access to high-quality, affordable child care that helps children, families, businesses, communities, and our economy thrive."

BACKGROUND: A fact sheet on the Small Business Child Care Investment Act can be found here.

A letter of endorsement of the bill from Bipartisan Policy Center Action can be found here.

Qualifications for non-profit providers to access SBA loans:

The bill does not change any loan requirements that exist for all SBA applicants. To qualify for SBA loans, a non-profit child care provider must:
- Comply with licensing requirements in the state they are located.
- Primarily provide child care for children from birth through school-age, and may also provide care for school-age children during school breaks and before/after school hours. The non-profit may also offer preschool or pre-K educational programs.
- Comply with criminal background check requirements per the Child Care and Development Block Grant Act for employees and regular volunteers.

The need:

51% of Americans live in a child care desert.
The shortage of providers and high cost of child care put a strain on working families. In 28 states and DC, one year of child care costs more than tuition and fees at a four-year public college.
Like many businesses, child care providers face significant start-up, operations, maintenance, and capital projects costs. With limited access to SBA programs, these costs serve as barriers for providers looking to establish, expand, or improve their operations.

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Issues:CongressEducation