Second Position MCA for Daycares and Child Care Centers
A second position merchant cash advance gives a daycare or child care center added working capital while a first advance is still running, usually to cover staffing, a licensing repair or the gap before state subsidy payments arrive. Funders size it on tuition and subsidy deposits left after the first debit, so the combined payment has to fit the weeks between subsidy cycles.
Why would a child care center need a second position?
Subsidy payments run on their own schedule
Child care subsidies often pay weeks after care is delivered, while staff are paid every week or two. A first advance covers one gap, and an enrollment jump or a delayed subsidy cycle opens another.
Repairs that licensing won't wait on
A failed inspection item, like a fence, a kitchen repair or a fire system fix, has to be handled before the center can stay open or add children.
What two advances take in a slow month
Here a child care center with $80,000 in deposits pays $7,200 a month on advance one; advance two, $24,000 at 1.38 for 5 months, adds $6,620.
| Month | Deposits | First advance only | Both advances |
|---|---|---|---|
| An average month | $80,000 | 9.0% | 17.3% |
| A slow month, 24% under average | $60,800 | 11.8% | 22.7% |
A slow month is the test: 22.7% gone before rent or payroll. BLS headcount for child care services (NAICS 624410) moves just 5 points over the year, so use your own thinnest month here.
How do funders read a daycare file with an advance open?
They separate tuition drafts from subsidy deposits, count enrollment and subtract the first funder's daily debit. Steady tuition and regular subsidy deposits support the offer. A center that relies mostly on subsidy payments shows bigger gaps between deposits, which shrinks the room.
Documents that help
- Enrollment and tuition reports for recent months.
- Subsidy payment notices that match the deposits.
- The first funder's contract and current balance.
When should a center look at consolidation instead?
When the first debit already takes a big share of tuition, adding a second one leaves nothing for payroll in a slow subsidy week. A consolidation with one payment over a longer term usually fits better.
Quick answers
Can a daycare get a second merchant cash advance?
Yes, when tuition and subsidy deposits leave room after the first debit. Funders read enrollment, tuition drafts and subsidy payments, subtract the existing payment and size the second position on what's left. Subsidy notices that match the deposits and the first funder's balance letter make the file easier to approve.
Do subsidy payments count for a daycare advance?
Yes. Subsidy deposits are revenue, and funders count them once they land in the business account. Because they arrive on the agency's schedule rather than weekly, funders size the payment around the gaps between them. A weekly debit timed after the subsidy deposit fits a center better than a daily one.
What do funders worry about with child care centers?
Licensing and enrollment. A center with an open licensing issue or falling enrollment reads as riskier, because either one cuts revenue fast. A clean inspection record, a waiting list and steady tuition drafts answer those concerns and support a better second position offer with a payment the center can carry.
More for daycares and child care centers
- Same-day merchant cash advance for daycares and child care centers
- MCA consolidation for daycares and child care centers
- Revenue-based financing for daycares and child care centers
- Business line of credit for daycares and child care centers
- How funders read daycares and child care centers
- Second position MCA: how it works
Run your own numbers with the stacked payment calculator.
Want to see what fits a child care center like yours?
Tell us your slow months and your open advances, and we'll shop the file with funders whose programs fit. Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.