SOCIAL INFRASTRUCTURE
CHILDCARE operators are increasingly unable to secure either real estate or business debt from major banks and are instead turning to...
Fund manager Finexia reports to committing more than $70 million in funding for private childcare centres across the country...
According to Patrick Bell, director at Finexia, the of majority of the major banks don’t have the capability or policy inclination to offer funds that...
With Bell noting non-banks currently cater to around 21% of all childcare property debt, a figure that needs to rise to 26% to meet the industry’s demand...
“We have established operators with proven track records coming to us for credit, because they want to expand to keep up with growing waitlists but...
“Operators seek funding for either real estate or business debt, and there are significant roadblocks on both sides of the ledger with bank finance.”...
Each year, around 300 new childcare centres open across Australia, according to Australian Childcare Alliance, but the system is still under strain...
However, a recent report by The Leasing Agency found childcare operators were still remaining positive despite a 20% surge in rents over the...
“The present childcare property debt is $18.3 billion and I anticipate this will rise to $20.7 billion by 2025,” added Bell...
“The banks would need to grow their childcare loan books twice as fast as they have in the past three years to keep pace with this growth.”...
By Bell’s estimations, the industry will need around $800 million in new business trading debt each year to sustain operations...
“There’s significant demand for funding, but again the banks are not meeting the market due to increasingly restrictive regulations,” added Bell,...
“Banks also don’t loan to greenfield projects unless they meet a 50 per cent occupancy threshold, and then will only offer 45 per cent of funding.”...
Bell also expects that non-bank lenders will need to increase their total exposure to childcare real estate by 51% over the three years to 2025 to meet the...
With the childcare industry set to be worth an estimated $17.2 billion in the 2028-29 financial year, up from $14 billion in 2020-21, according to research by...
“We did see a dip in childcare revenue during Covid due to work and education policies, but with most people now back in the office, there’s been...
“We have had several operators who have come to us for credit and have also invested in the fund, as well as industry veterans who have sold their centres and...