Industry guide for buyers
Occupancy, fee caps, wages, subsidy claiming and the 60-day service approval transfer — and how to line up finance with it.
Joint notice to the regulator at least 60 days before transfer.
Review by room, by day, over 24+ months.
Worker Retention Payment services have a 5.8% fee cap window.
Reconcile Child Care Subsidy received against enrolments.
Quick answer: Financial due diligence on a childcare centre should cover occupancy by room and day, fee levels and any fee-growth limits, wage costs and workforce funding conditions, staffing and qualification requirements, Child Care Subsidy claiming records, the centre's quality rating and compliance history, the lease, building condition, local supply and demand, and the 60-day service approval transfer timeline. Together these determine whether the centre's income can support the price and the finance.
Childcare is one of the most regulated businesses you can buy, and the regulation shapes the timeline as much as the numbers. That's why this guide starts with the transfer timeline — and where finance fits into it — before working through the financial checks.
You need provider approval to operate a centre. To transfer an existing service approval, the transferring and receiving approved providers must jointly notify the regulatory authority at least 60 days before the transfer is intended to take effect. The regulator can intervene, and must notify both parties at least 10 days before the intended date if it does. The receiving provider must tell enrolled families at least 7 days before the transfer.
Lining up settlement with the transfer date avoids paying for a centre you can't yet operate, or holding an approved transfer while funding is still being assessed.
Licensed places tell you capacity; occupancy tells you income. Ask for occupancy by room, by day of the week and over at least 24 months, plus waitlists and enrolment trends. Mondays and Fridays often look different from mid-week.
Check how recent policy changes have affected enrolments at this centre specifically. From 5 January 2026, the Three Day Guarantee gives all families eligible for the Child Care Subsidy at least 72 hours of subsidised care per fortnight, replacing the activity test.
In childcare listings we reviewed in October 2026, centres advertising occupancy above 95% were priced in the millions, while larger centres with occupancy still building were offered as low-priced asset sales. Licensed places alone say little about value.
Compare daily fees with local competitors and with the Child Care Subsidy hourly cap. If the centre receives the Worker Retention Payment, it has agreed to limit fee growth. Services already receiving the payment must not increase fees by more than 5.8% between 8 August 2026 and 7 August 2027. Services joining the program have their own 5.8% window, from 17 June 2026 to 7 August 2027. Your financial model must reflect whichever ceiling applies.
Wages are the largest cost in a centre. Review:
Most centre income flows through the Child Care Subsidy, so the accuracy of the centre's subsidy submissions and attendance records matters. Review how sessions and attendance are recorded and reported, and reconcile subsidy received against enrolments and occupancy. Problems found after settlement can affect both income and the centre's standing with regulators. Ask your accountant or a sector specialist to review this as part of due diligence.
Check the centre's National Quality Standard rating, any compliance actions or conditions on the service approval, and how serious incidents have been handled. A poor history can affect enrolments, staff retention and the regulator's view of the transfer.
Most operators lease. Review rent against revenue, the remaining term and options, the rent review method, outgoings, make-good and assignment consent. Seller incentives such as rent assistance mean the current rent may not reflect the true cost — model the full market rent. If the freehold is part of the deal, see buying a business and its premises.
Playgrounds, shade structures, kitchens, bathrooms and security systems need maintenance and occasional upgrades. Include any works needed after settlement in your budget, and ask for maintenance records rather than relying on a walk-through.
New centres nearby can pull enrolments. Look at recent approvals in the area, local population trends and how the centre competes on fees and quality. Strong occupancy today is worth less if two new centres open down the road next year.
Subsidy payments, family gap fees and wages each run on their own cycle. Plan working capital for the first months after the transfer — see our working capital explainer.
| Area | Ask for |
|---|---|
| Occupancy | By room and day, 24+ months; waitlist |
| Fees | Fee schedule against local market and subsidy cap; applicable fee-growth limit |
| Wages | Payroll by role; award or agreement; Worker Retention Payment participation |
| Ratios and qualifications | Rosters against requirements |
| Subsidy claiming | Attendance records; subsidy reconciliation to enrolments |
| Quality and compliance | NQS rating; conditions; incident history |
| Transfer | Provider approval; 60-day notice plan aligned with finance |
| Lease | Term, options, rent reviews, assignment, any rent incentives |
| Building | Condition report; upcoming works |
| Market | New centres nearby; local demand |
For the lender factors that apply to any acquisition, see our due-diligence guide and the business acquisition due-diligence checklist.
We look at the deal structure early, so finance is considered before you commit to a price or settlement date.
Acquisition, equipment and working-capital options laid out side by side, so you can see how each part of the purchase could be funded.
Our founder's background on the lending side of major Australian banks shapes how we help you prepare the evidence lenders look for.
Review occupancy by room and day, fees compared with the market and any fee-growth limits, wage costs and workforce funding, staffing ratios, Child Care Subsidy claiming records, the quality rating and compliance history, lease terms, building condition, local competition and the service approval transfer timeline. These together show whether income can support the purchase.
The transferring and receiving approved providers must jointly notify the regulatory authority at least 60 days before the transfer is intended to take effect. The regulator may intervene, and the receiving provider must notify enrolled families at least 7 days before the transfer.
Services receiving the payment must pass it on to eligible workers and limit fee increases. Existing participants must not raise fees by more than 5.8% between 8 August 2026 and 7 August 2027; services joining have a 5.8% limit from 17 June 2026 to 7 August 2027. The program runs to 30 June 2028, so model both the wage funding and the fee ceiling.
Occupancy determines revenue, while most costs — especially wages and rent — are largely fixed by licensed capacity and ratios. Small changes in occupancy can make a large difference to profit, so review it by room, by day and over time.
Finance may be available depending on lender criteria and your circumstances. Lenders typically consider occupancy history, earnings, lease security, operator experience, the transfer timeline and the proposed structure. Talking to a broker before committing helps align funding with the 60-day transfer process.
Considering buying a business? Speak with Probiz Finance about your finance options before committing to the transaction.
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This information is general in nature only and does not take into account your objectives, financial situation or needs. Consider your circumstances and seek appropriate professional advice before making a financial decision.
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