Day Nurseries
Buying a day nursery?
We arrange the finance. You get the keys.
A day nursery with full places, a waiting list, and a trusted local reputation is one of the most fundable businesses in the childcare sector. The combination of government-funded hours and private fees creates a diversified, largely recession-proof income stream that specialist lenders understand and actively want to fund — provided the application presents the full picture correctly.
What lenders look at
Occupancy is the primary metric. Lenders will want to see consistent occupancy above 80% and will assess the trend over time rather than a single snapshot. A nursery with a waiting list is a particularly strong proposition — it demonstrates demand that exceeds current capacity and gives the lender confidence that occupancy will be maintained through the ownership change.
The income mix between government-funded hours and private fees is assessed carefully. Funded hours — the government's free childcare entitlement for two, three, and four year olds — provide contracted, predictable income. Private fees generate stronger margins. A well-balanced mix with a growing proportion of private income is the most fundable profile.
The Ofsted rating carries significant weight. An Outstanding or Good rating materially strengthens the application and often unlocks better terms from lenders who understand the sector. A Requires Improvement rating does not make funding impossible but needs a clear narrative around remediation — lenders will want to understand what is being addressed and by whom.
The registered manager and staff team are assessed carefully. Ofsted requires a suitably qualified registered manager to be in place at all times — where the seller holds this role, the transition plan for the incoming manager is a critical part of the application. Staff retention and qualification levels across the team are also reviewed, as Ofsted ratios and qualification requirements directly affect the nursery's ability to maintain its registration and rating.
Premises are a significant factor — particularly where the nursery operates from a purpose-fitted freehold property. The building provides additional security that typically improves both the loan amount available and the terms. Leasehold nurseries are assessed on lease length, rent level, and the landlord's willingness to grant a new lease to the incoming owner.
How we help
We are acquisition finance and loans brokers, not lenders. We package your application, present it to the funders with genuine childcare sector appetite, and manage the process from first conversation through to completion.
We also arrange government-backed facilities for day nursery acquisitions — helping buyers access up to £2 million toward their purchase where the criteria are met.
Every nursery acquisition is different. Tell us about the business. We will take it from there.
For the wider funding options, explore business acquisition finance.
01 — Who we help
First-time buyers, experienced operators, and everyone in between
First-time buyers
Buying your first nursery, stepping out of a manager role, or backing a practitioner-led venture.
Existing operators expanding
Adding a second setting, increasing registered places, or consolidating a small nursery group.
Family business buyers
Taking over a parent’s nursery, buying out a sibling, or passing the setting to the next generation.
Investors
Buying a nursery as a business investment, to lease out for rental income.
02 — The opportunity
What can we help you buy?
We arrange acquisition finance and loans for nursery and childcare businesses across the UK — from small day nurseries to larger multi-room settings.
Day nurseries with waiting lists
A nursery with a full register and a waiting list is the strongest possible starting point for a buyer. Demand for quality childcare across the UK consistently outstrips supply — a well-rated nursery in a residential area with working families nearby is a resilient and fundable acquisition. The asking prices for leasehold and freehold day nurseries typically range from £120,000 to £750,000.
Nurseries with Outstanding or Good Ofsted ratings
An Ofsted rating plays the same role in nursery finance as a CQC rating in care home acquisitions — it is central to both valuation and lender confidence. Outstanding and Good rated nurseries attract the strongest lender appetite and the most competitive funding terms.
Nurseries with funded hours income
Government-funded hours — 15 and 30 hours for eligible children — provide a contracted income floor alongside private fee income. The mix of funded and private hours affects both the revenue profile and the funding structure, and is assessed carefully by lenders who understand the childcare sector.
First-time nursery buyers
Many nursery managers employed within existing settings are ready to own their first nursery. Lenders assess relevant sector experience — including management, Ofsted compliance, and safeguarding responsibility — alongside the nursery's trading performance.
Expanding to a second nursery
Nursery owners with a successful first setting looking to add a second benefit significantly from their existing trading history. We structure funding for nursery group growth, presenting the established track record to lenders who actively support multi-site childcare expansion.
Purpose-fitted nursery premises
Nurseries operating from purpose-fitted premises — with the right room ratios, outdoor space, and regulatory compliance built in — command a premium and attract the strongest lender appetite. Where the deal includes a freehold property, a commercial mortgage is usually the primary funding route.
03 — The transaction
What can we finance?
The Business Purchase
Funding to buy a trading business, including goodwill and the business assets.
The Freehold
Funding for the purchase of the premises from which the business operates.
The Leasehold
Funding to buy a business operating from leased premises.
Fixtures, Fittings and Equipment
Where appropriate, funding can also take account of the assets required to operate the business.
Working Capital
Depending on the transaction, we can arrange funding for the initial working capital required after you take ownership.
Every deal is assessed on its own merits — not every element of every purchase will be financeable, and we'll tell you plainly what is and what isn't.
04 — The lender's view
What will lenders look at?
Lenders want to see a professionally prepared funding application. They want to know that the business is viable, that the proposed borrowing is affordable and that their loan can be repaid as agreed.
We use our proven iLendi Six™ method to build a strong funding application around the things lenders need to understand about your purchase.
Read more about the iLendi Six™05 — The funding
How much can you borrow?
Every purchase is different. The amount you can borrow will depend on the business, its trading performance, the purchase price, your circumstances and the structure of the transaction.
For nurseries, lenders will look at registered places versus occupancy, the funded-hours and private-fee split, staff qualifications and retention, and the Ofsted rating.
We arrange funding and work with you to find the financing solution that best fits the purchase.
06 — The completion
The iLendi Approach
Three steps from finding the business to owning it.
01
The Discovery
You have just found the business you want. You tell us all about it.
02
The Finance
You need financing to buy the business; we find the money.
03
The Completion
We stay by your side through to legal work completion and the business is yours.
Common questions
Buying a day nursery — your questions answered
Does the Ofsted rating affect the funding available?+
It does. An Outstanding or Good rating gives lenders confidence and often unlocks better terms. Occupancy levels and the mix of funded hours and private fees are assessed alongside it.
How much deposit do I need to buy a day nursery?+
Most day nursery acquisitions are funded with a deposit of around 20% to 30% of the purchase price, though this varies with the strength of the trading figures, whether the deal includes freehold property, and your own experience. Where there is property security or a particularly strong trading history, lenders can sometimes go further.
Can I borrow against goodwill when buying a day nursery?+
Yes. Specialist acquisition lenders will lend against goodwill where the trading history supports it, which is essential for leasehold deals with no bricks-and-mortar security. The application has to be presented so the underwriter can see the sustainable, transferable earnings behind that goodwill.
How long does it take to arrange finance to buy a day nursery?+
Indicative terms are usually available within 48 hours of your enquiry. A full offer typically follows within two to four weeks, with completion driven mainly by valuation and the pace of the legal work on both sides.
Is iLendi Capital a lender or broker?+
iLendi Capital is an acquisition finance and loans broker, not a direct lender. We work with buyers across the UK to prepare their funding applications, introduce them to the lenders most likely to approve them, and manage the deal through to completion. We also specialise in government-backed facilities, helping you secure up to £2m toward your purchase.
Keep exploring
Related businesses we fund
Buyers of day nurseries often look at these neighbouring sectors too.
Found your day nursery?
Let's find the finance.
Begin your funding process
Start with a conversation.
Tell us what you want to buy and an experienced funding specialist will call you back same day to discuss how we can help.
Other ways to contact us
Send an email:enquiries@ilendicapital.co.ukCall us: +44 (0)20 3488 8126We'll open WhatsApp with: "Hello iLendi Capital — I'm looking at buying a business and would like to talk."