A few states, including New York, Massachusetts, and Illinois, have used another increasingly popular type of private-public collaboration to expand the supply of child care. It involves the use of loans, typically made to day-care centers or preschools for expansion rather than start-up costs.

New York State's involvement in loans for day-care centers dates to 1969 when legislation was passed permitting centers to borrow for construction. The state used funds generated by the sale of bonds issued through the Housing Finance Authority to guarantee mortgages issued to centers by banks. The centers' mortgage payments were financed by fees for services. Five large, privately operated centers were constructed in New York City as a result of this lending program. No defaults on any of the mortgages have been reported.

The Chicago Community Trust's Loan Project, operated in collaboration with the Illinois Department of Children and Family Services and the Day Care Action Council of Illinois, works quite differently. The trust provides the loan money; the department increases the dollar amounts of its contracts with the centers borrowing money, as well as the numbers of children expected to attend the centers; and the council provides technical assistance to center staff. Included in the project are centers that care for infants, preschoolers, and school-age children. During the project's first year, ten centers were awarded loans of up to $50,000, with funds used for expansion rather than for site procurement or construction.

Recently, the State of Maine, in partnership with the federal government, the Foundation, and several other private donors, launched the Child Care Development Project. Administered by Coastal Enterprises, a community development corporation, the project aims to stimulate the growth of affordable quality child care, particularly for families with low incomes, by combining financing with business counseling and training in early childhood education and care. Grants and loans for a minimum of thirty family day-care homes and centers will be available over the next two years for start-up and expansion purposes, creating at least 250 new childcare slots. An evaluation will be conducted by the University of Southern Maine's Child and Family Institute to help determine the project's potential replicability.