Access Funding for Private Schools to Expand Your Presence

November 18, 2022

There is a rising demand for new private schools in the region, and a need for existing private schools to expand their campuses, but some lack access to immediate funding for construction and growth opportunities. If you want to fulfill your vision of opening a private school or parochial school that inspires and innovates, or expand your current campus in order to increase your student enrollment, a bank loan with Texas Gulf Bank can help.

Discover how to access funding for your future or current private school campus, the different types of business loans available, and why Texas Gulf Bank is the lending partner your campus needs to grow and flourish.

How to Fund Your Campus Construction and Growth

Traditionally, private schools have two primary options for funding: donations and paid school tuition. Private schools do not have access to most types of state funding like public schools, and other public funds or tax credits may be difficult to obtain.

Unfortunately, there may be gaps in fundraising that make it difficult to expand a current private school campus, and a brand-new campus will not have immediate tuition payments that can offset construction costs. Bank loans help cover the costs associated with constructing your own school campus, building expansions, and other key expenses.

Bank financing can help cover private school start-up or renovation costs such as:

Land purchase
Campus construction (materials and labor)
Office furniture and equipment
Textbooks and classroom supplies
Technology and computers
Staff recruitment
Campus marketing
Initial salaries
Unexpected expenses (building repairs, equipment replacement)

Reliable bank loans provide your school with the ability to offer a quality private education in a safe, modern, fully equipped facility that is conducive to learning.

Types of Financing Available to Private Schools

Private schools can pursue a number of financing options that best meet their unique campus needs, whether they are building a school from the ground-up, renovating and expanding an existing campus, or refinancing current debts for more favorable terms.

Construction Loans

Administrators interested in developing a new school campus from the ground-up may apply for a construction loan to cover construction costs. A construction loan provides funding for the purchase of land, materials, labor, permits, and other related construction costs.

Construction loans may be the ideal choice for your new construction or campus expansions since there are a variety of loan options available. Your campus may apply for a short or long-term construction loan with a fixed or variable interest rate, and funds can be used for new builds, expansions, or interior renovations.

If approved, construction loan funding is disbursed in a series of payments directly to your building contractors based on a draw schedule, which is a pre-approved timeline for construction milestones.

Term Loans

For private schools in need of financing for other major expenses or upgrades, a term loan may be a good financial solution.

Term loans can be used for large-scale campus investments such as:

Athletic field construction
Technology upgrades
Classroom additions
Enhanced security systems
Campus signage
New campus locations

In addition to major purchases and property enhancements, a term loan may also be used to consolidate or refinance existing debts for a private school. Term loans can potentially improve cash flow, as well as the financial health of your school.

With the funds from a term loan, your campus is able to solely focus on providing exceptional educational services and inspiring young minds through a captivating curriculum.

Revolving Line of Credit

If your campus needs a steady financial resource to meet unexpected costs, a revolving line of credit can help. Similar to a credit card, a business line of credit allows your campus to quickly cover any emergency expenses that may arise, such as plumbing repairs or replacing teacher laptops.

Your campus can utilize the funds from a line of credit whenever a specific need arises, with the flexibility to borrow up to the full limit. You would only repay the specific amount used, along with accumulated interest.

A revolving line of credit is especially helpful for private schools that may have gaps in cash flow throughout the school year, such as summer months when tuition is not collected, or if there is a decrease in private donations.

How to Apply for Private School Funding

Texas Gulf Bank proudly partners with private and parochial schools throughout the greater Gulf Coast region to offer reliable, top-quality financial resources that improve and strengthen their campuses.

The application process for a Texas Gulf Bank construction loan, term loan, or revolving line of credit begins with an initial assessment to determine the loan viability. Applicants will need to complete a full loan package that contains all supporting documentation, as well as meet credit and lending criteria in order to be approved for a loan.

Potential borrowers will need to provide documentation including, but not limited to:

Completed loan application
3 years of personal tax returns for owners with 20% or more of school ownership
3 years of business tax returns
Personal financial statement for owners
3 years of balance sheets and profit and loss statements
Construction budgets and timelines
Detailed list of operating expenses
School enrollment figures
Current and future tuition projections
Historical data for grants or private funding
Historical data for prior capital campaigns

Because Texas Gulf Bank is a community-based bank, in-house reviews begin immediately after the initial loan assessment and receipt of all required documentation. If approved, funds will be made available as soon as possible to allow your campus to begin the next phase of your campus goals.

Texas Gulf Bank Can Help Your Campus Thrive

With over 100 years of banking experience, Texas Gulf Bank provides both short- and long-term lending opportunities to help new and established private and parochial schools with their future goals. If you want to stop renting facilities and construct your own school, or you want to expand your current campus to accommodate a larger number of private school students, Texas Gulf Bank is ready to help.

Contact us to learn more about funding for private schools and parochial schools, or to begin your application process today.

Loans subject to credit approval.