What is a guaranteed loan?
Often is can be difficult for child care providers to meet the requirements for typical business financing from a bank. The Division of Child Care and Early Childhood Education administers a fund established to support the development and expansion of child care facilities in the state. With these funds the state of Arkansas acts as a guarantor for child care providers who otherwise would not qualify for the loan at the providers selected lending institution. The total amount of the loan request is determined by the business needs of the provider. If funding is approved, the bank issues the loan and the state guarantees, in case of default, to reimburse the bank for 80% of the outstanding principal balance, up to a maximum of $25,000. In other words, the state of Arkansas takes a role similar to that of a co-signer on the loan, but only for the amount established in a guarantee agreement with the bank.
Who is eligible for guaranteed loans?
Those who desire to establish a new licensed child care facility or expand an existing licensed facility may apply for a guaranteed loan. Either licensed child care family homes or licensed child care centers may obtain support through the Guaranteed Loan Fund. If the funding is for the purpse of establishing a new facility, licensig requirements must be completed in a timely manner after the funding is obtained.
What types of activities or items may be financed with the loan funds?
These funds may be used for any aspect of establishing or expanding a child care facility. this may include, but is not limited to, the following: construction and remodeling costs; temporary support for staff salaries; temporary support for operating expenses such as utilities, rent, food, supplies, and other normal business expenses; equipment for playgrounds; equipment for learning environments; training expenses; advertising; and transportation costs.
How do I apply for a guaranteed loan?
Application forms for Arkansas Child Care Facilities Loan Fund may be obtained through the Arkansas Division of Child Care and Early Childhood Education Program Support office located at 700 Main Street, P.O. Box 1437, Little Rock, AR 72203. You may request an application packet by writing to that address, by phone at 501-682-9699, by faxing your request to 501-682-4897, or downloading the application directly below.