H.R. 7109: Small Business Child Care Investment Act

This bill, known as the Small Business Child Care Investment Act, aims to enable nonprofit child care providers to access certain loan programs offered by the Small Business Administration (SBA). The bill seeks to recognize these providers as small business concerns, allowing them to benefit from financial supports typically available to small businesses. Here's a breakdown of the key points:

Eligibility for Loans

• The bill specifies that a "covered nonprofit child care provider" has to meet several criteria:
  • It must comply with state licensing requirements for child care.
  • It must be a nonprofit organization described as tax-exempt under section 501(c)(3) of the Internal Revenue Code.
  • It must primarily provide child care for children from birth until they are of compulsory school age.
  • It must comply with federal size standards for businesses in the child care industry.
  • All employees and regular volunteers must pass criminal background checks.
  • It may provide care for school-aged children outside of school hours or offer preschool programs.
  • It must certify that it will not discriminate in its practices based on several specified factors, including race, sex, or disability.

Loan Programs Involved

• Under section 7(a) of the Small Business Act, covered nonprofit child care providers can qualify for loans and financing. However, the SBA will not provide direct loans; rather, loans will need to be arranged through banks or financial institutions with additional guarantees in place.
• If a loan exceeds $500,000, the provider must secure a guarantee for timely payment from another entity.
• The bill also states that the SBA cannot deny a loan based on the provider's connection to a First Amendment-protected entity.

Reporting Requirements

• The SBA is tasked with providing an annual report to Congress, detailing:
  • The number and amount of loans made to covered nonprofit child care providers under section 7(a).
  • The number and amount of financings provided under the Small Business Investment Act.
  • Any additional information deemed relevant by the Administrator.

Overall Impact

The bill's provisions are intended to increase access to financial resources for nonprofit child care providers, allowing them to expand their services and capacity to care for children in their respective communities.

Relevant Companies