Finance to buy a childcare centre

Buying an established childcare centre can be a faster path into early learning than building one. The rooms are fitted out, families are enrolled and educators are in place. But the price reflects that, and the risks are specific: occupancy can slip after a change of ownership, key staff can leave, and compliance issues can surface after settlement. Here’s how finance for a centre purchase usually works, and what to check first.

Going concern, freehold or both?

Purchase type	What you buy	How it’s commonly funded
Going concern	The operating business: goodwill, equipment, enrolments, staff, in leased premises	Property-secured loan over the buyer’s home or other property
Freehold only	The land and building, usually with an operator as tenant	Commercial property loan
Freehold and going concern	Both the business and the building	Larger property-secured loan, often split between the two parts

Each has a different risk profile. A freehold investor relies on the tenant paying rent. A going-concern buyer relies on the centre trading well.

What do lenders look at in a childcare purchase?

1. Occupancy history. By room and by day, over at least twelve months. A lender will want to see how occupancy has moved through the year, not just its best month.
2. Licensed places and room mix. Babies’ rooms need more educators per child than older rooms, which affects margin.
3. Wages as a share of revenue. The biggest cost and the clearest signal of how efficiently the centre runs.
4. Rent and lease terms. Rent as a share of revenue, the remaining term, options and landlord consent to assignment.
5. Quality rating and compliance. Recent assessment outcomes and any compliance history.
6. Waitlist and local demand. Evidence that places will stay full.
7. Your experience. Or the experience of the manager who’ll run it.

How does policy affect the numbers?

Two changes are worth building into any purchase model:

• The 3 Day Guarantee. ACECQA says that from 5 January 2026, CCS-eligible families can get 72 hours of subsidised care per fortnight for each child. For some centres that lifts demand for additional days.
• The Worker Retention Payment. business.gov.au says the grant funds a 10% wage increase for eligible staff and a further 5% in the second year, running from 2 December 2024 to 30 November 2026, with conditions including limits on fee growth. A buyer should understand how the centre currently receives and passes on the payment, and how wages and fees are expected to sit after the grant period ends.

See care workforce wage costs for more on planning for wage changes.

How is a centre purchase usually financed?

Most going-concern purchases are funded with property-secured business loans from $20,000 to $5,000,000, as first mortgages, second mortgages or caveats over residential or commercial property. Operators who already run centres may access unsecured, cash-flow and line-of-credit options for smaller needs, typically $5,000 to $500,000 measured against your turnover and statements.

Allow for working capital beyond the price: subsidy timing, a few weeks of wages, and any small upgrades you want to make straight away. If you’re partway through negotiations, a 60-second enquiry will tell you what’s realistic before you sign.

What to check before you commit

business.gov.au suggests reviewing three to five years of financial records, confirming licences and permits, checking the lease and landlord consent, reviewing contracts, inspecting equipment and searching the Personal Property Securities Register. For a childcare centre, add:

• the service approval and what’s needed for a new approved provider
• educator qualifications, rosters and staff turnover
• enrolment records and how many families are on fixed days
• the most recent quality rating and any notices from the regulator
• CCS administration: session reporting practices and any outstanding issues
• the condition of outdoor areas, bathrooms and kitchens, which are costly to fix

Our due diligence checklist sets these out in more detail.

An illustrative example

Illustrative only. An experienced centre director wants to buy the 75-place centre she currently manages from its retiring owner. Occupancy has been steady for several years and the lease has a long term remaining. She has equity in her home and a small amount of savings. A property-secured loan over the home could fund most of the price and costs, with a line of credit set aside for subsidy timing in the first months. Because she already knows the team and families, the risk of occupancy dropping after settlement is lower.

Building instead of buying?

If you’re weighing up a new centre, read our guide on funding a childcare centre ramp-up, which covers the months when rooms are open but not yet full. For running an existing centre, see childcare centre loans.

Common reasons centre purchases stall

Some deals fall over late, after buyers have spent money on advice. The usual culprits are predictable:

• Lease problems. A short remaining term or a landlord who wants new conditions before consenting.
• Occupancy surprises. Figures that looked strong on a summary but softer on the room-by-room data.
• Staffing gaps. A director or key educators planning to leave with the vendor.
• Approval timing. The new approved provider arrangements taking longer than the settlement date allows.

Raise each of these early. A lender will ask about all four, and a buyer who has already answered them looks far more prepared.

See if your purchase could qualify

A good centre is a community asset, and buying one is a big step. Asking about finance is a small one: about a minute, with no credit check. Your enquiry isn’t shopped around to lenders. A real person who understands occupancy, ratios and subsidy timing calls you to work it through.

Please be accurate on the form, including the purchase price, your state and any property you could offer, so we can point you to the right option the first time.

See if my centre purchase qualifies →