In an effort to prioritize health and safety early in the pandemic, state and nationwide orders forced schools to close and children to finish the remainder of the school year online, while companies adopted work-from-home arrangements or altered the frequency of in-person shifts. However, there were still many essential workers who needed to physically go into work every day.
Among these essential workers were parents who, out of necessity, turned to daycares to care for their children while they were working. In fact, because so many industries were deemed essential, many daycares were still operating at high occupancy levels during the pandemic, with even more families on the waiting list.
But attendance overall at daycares continued to fluctuate based on varying state stay-at-home guidelines and tightened disposable incomes; the daycare industry needed support.
Daycares across the country were quick to reach out to The Bancorp for financial advice and assistance to secure Paycheck Protection Program (PPP) loans in order to stay open.
How did these loans lend a helping hand? In addition to helping daycares meet rapidly changing health and safety guidelines, it also aided in the following:
School and daycare regulations require a certain child-to-staff member ratio, and smaller organizations have spent many years building and training a staff of highly qualified caretakers. In order to retain this loyal employee base, daycare owners needed to be able to pay all employee salaries, even if they weren’t operating at the time. Money secured through PPP loans helped owners pay their staff so that when enrollment stabilized, and the 2020-2021 school year kicked off, organizations that were closed as a result of the pandemic were able to reopen and continue caring for children.
Many daycares have large overhead costs due to employee salaries, insurance costs, and franchise fees, among other expenses. Business owners had to find ways to cut costs wherever they could, whether for supplies or other expenses, in order to grow their profit margins and stay afloat. Owners realized that to better prepare for their organization’s future, they needed to have a separate savings fund in the form of cash on hand.
In 2019, there were more than 670,000 individual childcare business in the U.S.,1 and that number is expected to continue to grow 3.5% each year as the population continues to increase. Similarly, parents’ expectations of schools and daycares alike continue to increase, which means these businesses will need help financing additions, renovations, and more faculty positions.
Regardless of whether or not daycares are deemed essential by the government, these businesses are undeniably essential to the parents who rely on them to care for their children. For that reason, it was crucial that these business owners were able to secure PPP loans in order to lend a helping hand to the parents who are helping combat coronavirus, regardless of the industry. The Bancorp is proud to have supplied these businesses with the funds necessary for success.
If you have questions about how The Bancorp can help support your small business, please visit our contact page.
The opinions, findings, or perspectives expressed in this content are those of the author and do not reflect the official policy or position of The Bancorp, Inc., its affiliates, or its or their employees.