Grants to Support New and Expanding Childcare Businesses is sponsored by California Department of Social Services. This opportunity supports mission-aligned projects and measurable outcomes.

Funding Options for New Child Care Businesses | My Child Care Plan - Help Center Funding Options for New Child Care Businesses Funding Options for New Child Care Businesses in California (2025) Updated over 12 months ago Starting a child care business in California requires not only passion and expertise in child development but also financial resources to cover startup costs, licensing fees, facility improvements, and operational expenses.

Finding the right funding can be the difference between a struggling business and a thriving one. This guide explores various funding options available specifically for California child care providers, from government subsidies to loans designed for small businesses.

California-Specific Funding Programs Child Care and Development Fund (CCDF) Subsidies and Payment Programs The CCDF supports various subsidized child care payment programs that create reliable income streams for providers serving eligible families.

Provider benefits: Consistent payments on a regular schedule, potential for Cost of Care Plus Rate Payments Participation: Register as a subsidy-eligible provider through your local Alternative Payment Program (APP) or Resource & Referral (R&R) agency Eligibility: Must meet licensing requirements and be willing to serve families that qualify for subsidies Reimbursement Rates: Payment amounts are based on Regional Market Rate (RMR) ceilings that vary by: Type of care (center-based or family child care home) Age of child (infant, preschool, school-age) Hours of care (hourly, daily, weekly, monthly) Provider's license status (licensed or license-exempt) Understanding Reimbursement Ceilings: Current RMR ceilings are set at the 75th percentile of the 2018 market rate survey Providers can view county-specific rate ceilings at https://rcscc.

adm. dss. ca.

gov/ Higher reimbursement rates (adjustment factors) are available for: Evening/weekend care (25% increase if 50%+ of care occurs during these times) Children with exceptional needs (20-50% increase depending on severity) License-exempt providers receive 70% of the family child care home ceiling rate Subsidy programs administered through CCDF in California include: Alternative Payment Programs: 70 programs across all 58 counties providing vouchers for over 161,000 children CalWORKs Child Care: Three-stage program supporting families transitioning from welfare to work Stage 1: Immediate child care for families receiving CalWORKs cash aid Stage 2: For families with stabilized situations or transitioning off CalWORKs Stage 3: Supports former CalWORKs families after 24 months off aid Family Child Care Home Education Network (FCCHEN): Networks that support licensed family child care providers Benefits: Professional development opportunities, educational resources, coaching/mentoring Requirements: Must be a licensed family child care provider and meet quality standards Support services: Educational support, assessment tools, parent engagement assistance Focus: Emphasizes educational outcomes and developmental support Payments are typically made monthly based on the number of children in care.

For information on becoming a subsidized provider, contact your local Alternative Payment Program (APP) or Resource & Referral (R&R) agency . California Child Care Initiative Project (CCIP) The CCIP provides support and training to new and existing family child care providers, with a focus on increasing infant/toddler care and services in underserved communities.

Eligibility: New and existing family child care home providers, particularly those planning to care for infants and toddlers Training on child development, health and safety, and business management Licensing application assistance and pre-inspection home visits Reimbursement for licensing requirements and equipment costs Quality toys and learning materials Application process: Contact your local Resource & Referral agency to inquire about CCIP participation Priority areas: Infant/toddler care, underserved communities, and providers transitioning from license-exempt to licensed status Local First 5 Commission Grants Many county-level First 5 Commissions offer grants specifically for early childhood education providers in 2025.

These opportunities vary by county: First 5 Solano Annual Grants Program Funding: Up to $20,000 per grant (total program: $120,000 for FY2025/26) Deadline: March 10, 2025, at 5:00 PM Duration: One-year grants (July 1, 2025, to June 30, 2026) Eligibility: Projects must be in Solano County and benefit children 0-5, their parents/caregivers, or service providers Focus: Projects addressing gaps in services, community disparities, or time-sensitive community needs Details: Solano County - Current Opportunities for Funding San Diego Workforce Pathways Grant (WPG) Stipend Focus: Professional development for early learning and care teachers Eligibility: Teachers, assistants, licensed providers, and ECE students in San Diego County Priority: Non-subsidized settings, infant/toddler care, childcare deserts Application: Through the California ECE Workforce Registry Contact: San Diego County Office of Education for current details San Francisco Stipend for Early Educator Professional Development (SEEPD) Focus: Financial incentives for completing professional development milestones Eligibility: Educators employed at DEC-funded Early Learning For All sites who participate in CARES 3.

0 or EESSG Application Period: June 1-30, 2025 through the CA ECE Workforce Registry Funding: Varies based on milestones (up to $11,000 for multiple achievements) Milestones: Child Development Permits, specialization certificates, degree completion, and coursework Details: Stipend for Early Educator Professional Development (SEEPD) Lake County Early Education Teacher Development Grant Focus: Tuition support for early education credentials and degrees Eligibility: Both existing educators and those pursuing early childhood education careers Funding: Up to $2,800 for Bachelor's degree or teaching credential tuition, up to $375 for ECE units Application: Available through Lake County Office of Education Contact: Carly Swatosh-Sherman at Lake County Office of Education Quality Rating and Improvement System (QRIS) Funding Types: CSPP QRIS Block Grant ($50 million annually) and First 5 IMPACT initiatives Application Deadline: March 14, 2025 for the CSPP QRIS Block Grant FY 2025-26 Eligibility: Local QRIS consortia implementing the Quality Continuum Framework Focus: Enhancing quality in preschool programs serving low-income children Connection: Directly linked to California State Preschool Program quality initiatives Contact your county's First 5 Commission directly for specific opportunities in your area and current application deadlines.

The Small Business Administration's Microloan program provides loans up to $50,000 for small businesses, including child care providers.

Terms: Up to 6 years with interest rates between 8% and 13% Uses: Working capital, supplies, furniture, fixtures, and equipment Eligibility: For-profit child care businesses or non-profit centers that meet SBA size standards Application process: Apply through SBA-approved intermediary lenders with business plan, financial statements, and tax returns California lenders: CDC Small Business Finance, Opportunity Fund, and Working Solutions Community Development Financial Institutions (CDFIs) CDFIs specialize in lending to underserved communities and offer more flexible terms than traditional banks.

Pacific Community Ventures: Loans up to $250,000 for working capital, equipment, and construction No minimum credit score required, but personal guarantee needed Provides free business advising and technical assistance Low Income Investment Fund (LIIF): Offers grants and loans specifically for child care facility development Focuses on quality improvements and increasing access in underserved areas Provides specialized business support for child care operations Accion Opportunity Fund : Small business loans for underserved communities Mission Economic Development Agency (MEDA) : Financial services and technical assistance, particularly in San Francisco Self-Help Federal Credit Union : General business loans that can apply to child care Rural Community Assistance Corporation : Loans for rural small businesses, including child care Alternative Funding Sources Several general small business grant programs are open to child care providers in California: Monthly grants of $10,000 with annual prizes of $25,000 Specifically lists education/child care as an eligible business category Simple application process with rolling monthly deadlines Limited to women-owned businesses Application available at Amber Grants for Women Verizon Small Business Digital Ready: $10,000 grants offered periodically Requires registration on their platform and completion of at least two courses or events Open to all small businesses, including child care providers Application available at Verizon Small Business Digital Ready Tax Incentives and Credits Child care businesses in California can benefit from several tax advantages: Federal Tax Deductions for Home-Based Providers: Business use of home deductions for: Utilities (based on percentage used for business) Toys and educational materials Food and nutrition expenses for children's meals and snacks Professional development and training expenses Section 179 Deduction : Allows deducting the full cost of certain property (like playground equipment) in year of purchase rather than depreciating it over time Maximum deduction: $1,250,000 Deduction phases out when total qualifying purchases exceed $3,130,000 Qualifying Assets for Child Care Businesses: Playground equipment (swings, slides, structures) Educational technology and software Classroom furniture and fixtures Vehicles used for transporting children Equipment must be used more than 50% for business purposes Must be placed in service by the end of the tax year Claimed using IRS Form 4562 Consult with a tax professional specializing in child care businesses State Legislative Status: California's SB 533, which would have created employer child care tax credits, failed in February 2024.

The bill would have provided a 30% credit for startup expenses and contributions to child care plans. Federal Initiatives: Bipartisan federal legislation (Child Care Availability and Affordability Act) has been introduced to expand child care tax credits, including increasing the Employer-Provided Child Care Tax Credit (45F) and the Dependent Care Assistance Plan (DCAP) contribution limits.

Dependent Care Assistance Program (DCAP) DCAP allows employees to set aside pre-tax dollars for child care expenses, creating opportunities for child care providers: How it works for providers: Families use DCAP funds to pay for your services Providers receive payments directly from families Must provide receipts or invoices for services rendered Increased demand for child care services More stable and consistent payments from families Families can afford higher-quality care with tax savings Annual contribution limit: $5,000 per family (2025) Contributions are made pre-tax, reducing families' taxable income Typically offered through employers as a workplace benefit Must comply with state licensing requirements Need to provide documentation for family reimbursements Public-Private Partnerships Employer-Provided Child Care Credit (45F): Federal tax credit allowing employers to claim up to $150,000 annually (25% of qualified child care expenditures plus 10% of resource and referral services) Covers costs of providing on-site facilities, operating expenses, or contracting with local providers Business must spend at least $600,000 on child care expenses to receive full credit Helps increase child care availability in communities Corporate Sponsorship Programs: Major employers like Boeing and Patagonia offer on-site child care or partnerships with local providers Consider partnering with your local Resource & Referral (R&R) agency to connect with corporate sponsors, as R&Rs often have established relationships with businesses Some R&Rs may be able to share contacts or provide guidance on approaching local businesses interested in supporting child care Chamber of Commerce Initiatives: Los Angeles Area Chamber's " Cradle to Career " initiative advocates for quality early education as part of a comprehensive approach to workforce development Local chambers host networking events where child care businesses can connect with city officials and potential partners Chamber advocacy can lead to policy changes that advance affordable child care as a critical economic issue Alternative Child Care Models and Initiatives Parent Cooperative Models: Over 225 parent cooperatives operate in California as nonprofit, parent-governed child care centers Parents participate in governance, maintenance, and sometimes teaching alongside professional staff Benefits include cost savings, community building, and often better working conditions for staff The California Council of Parent Participation Nursery Schools (CCPPNS) provides resources, networking, and sometimes grants/loans to member schools Public-Private Partnerships: First 5 California's Raise CA Strong campaign engages businesses to increase affordable child care access and could potentially grow California's economy by $60 billion Assess your specific funding needs with a detailed budget and business plan Prepare essential documentation: Business plan with financial projections Child care licensing documentation Personal financial statements Schedule a consultation with a Small Business Development Center or Women's Business Centers advisor who specializes in child care businesses Create a funding strategy that combines multiple sources for maximum stability California Child Care Resource & Referral Network California Department of Social Services - Child Care Licensing California Small Business Development Center MyChildCarePlan.

org - Child Care Subsidy Programs Last updated: March 2025. Information subject to change. Contact funding sources directly for the most current requirements and availability.

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