How Low Income Investment Fund is strengthening the “workforce behind the workforce”

Family child care providers are often described as the workforce behind the workforce. They make it possible for parents to work and for local economies to function.

But these providers are also small business owners, often operating with thin margins, limited access to capital, and little formal recognition from the financial system. That tension sits at the center of Low Income Investment Fund's (LIIF) work.

To better understand what’s changing, we sat down with Angie Garling, Senior Vice President of Early Care & Education at LIIF, to talk about the Family Child Care (FCC) Microlending Initiative, what it was designed to shift, and what it’s revealing about how the small business ecosystem can better support providers who have long been overlooked.

Supported by Mastercard Strive USA, the initiative has been focused in California, where LIIF and its partners are working to expand access to financing for home-based providers while building the support systems needed for them to become more resilient.

The opportunity is significant:

• In California alone, there are more than 25,000 licensed family child care providers
• Many serve low- to moderate-income communities where child care options are already limited
• And more broadly, child care constraints continue to limit workforce participation and local economic growth across the United States.

What’s emerging is more than a state-level pilot. It’s a working model that is already generating proof points around access to capital, repayment, and business sustainability — with the potential to inform how similar efforts could take shape in other states and regions over time. This work starts with a simple but often overlooked shift: recognizing family child care providers not just as caregivers, but as small businesses worth investing in.

What was this work designed to change?

The Family Child Care (FCC) Capital initiative was designed to expand access to financing for home-based child care providers, who often have limited options through traditional channels. Tailored to the realities of small, home-based businesses, it pairs flexible capital with capacity-building support so FCCs can invest in and sustain their operations.

What shifted as a result?

Across the California providers who have participated, loans and technical assistance are helping them invest in their businesses and we have seen while maintaining strong repayment rates. That’s helping preserve local child care supply and enabling families to work and earn. At the same time, this work is also demonstrating at a broader level that FCCs are financeable businesses, creating a proof point that can inform efforts in other states.

Why does this change matter for small businesses?

FCC providers bring deep expertise in early childhood education, but often don’t have formal training in business finance or the additional staff to focus on it. This initiative helps bridge that gap, equipping providers to access capital responsibly and build more resilient, sustainable businesses.z

What did you learn that others in the field should pay attention to?

We learned that gaining the trust of child care providers requires sector-specific resources and knowledge of the particulars of how these businesses operate. For us, this means knowing things like the seasonal cadences of enrolling children and understanding how this impacts revenue and planning, and then translating that into a conversation about a business's ability to manage debit.

What is the next phase of this work?

The focus now is expanding reach, ensuring more of California’s 25,000 licensed FCC providers know about this offering through partnerships with local organizations, while exploring how this model could extend beyond California.

What makes home-based child care providers unique as small business owners?

Family child care (FCC) providers are situated at the unique nexus of the personal and the professional, often seen as service providers rather than small business owners. Recognizing them as small businesses is essential given how critical their services are for communities.

Why is strengthening child care businesses so important for local economies?

We like to say that they’re the workforce behind the workforce, because their services enable parents in low and moderate-income communities to work and earn more for their families, which in turn fuels their local economies. FCCs really are key community anchors who fuel enormous downstream economic benefits for their neighborhoods.

What kinds of support help childcare providers run sustainable businesses?

Over 25 years of working with child care providers, LIIF has seen how important it is to build FCC capacity across areas like business planning and marketing, financial management, facility upgrades, and attracting and retaining staff. Just as important is how that support is delivered. LIIF has had success providing one-on-one technical assistance to thousands of FCCs in California, alongside training sessions and more intensive cohort-based programs. And alongside that capacity building, providers need access to the right mix of capital, as well as public and philanthropic support that is essential to sustaining this critical sector.

What gives you optimism about the future of the childcare sector?

There is growing momentum, with more leaders stepping forward with bold proposals to support FCC providers in their communities. Many of those leading the way are women who understand FCCs’ “triple halo” effect, preparing children for success in life, enabling parents to work and pursue their professional goals, and powering local economies.