Opening a Private School in Texas? Use SBA Funding to Launch
March 20, 2023
A growing percentage of parents are searching for independent schools for their children to receive a quality education, driving up demand for private schools across Texas.
However, constructing, building, and launching a successful private school involves more than just a solid curriculum and excellent teachers – it requires significant funding solutions.
If you have plans to start a private school in Texas but need reliable financing options, consider applying for SBA funds to construct your school building and develop campus facilities.
Learn how SBA loans work, the application process for these types of loans, and how Texas Gulf Bank may be able to help you with opening a private school in our state.
The Basics of SBA Loans
The Small Business Administration (SBA) is a federal agency that helps entrepreneurs and small business owners by providing access to bank loans that are guaranteed by the federal government.
The SBA 7(a) loan is the most popular type of SBA loan, and eligible businesses may qualify to borrow up to $5 million for construction and related business expenses. Any type of private, for-profit school may apply for SBA 7(a) funding, including:
- Preschools or daycares
- Elementary schools
- High schools
- K-12 campuses
- Language schools
- Tutoring facilities
- STEM learning centers
- Parochial or religious schools
Through SBA funding, private school owners can have a one-time-close loan that covers the majority of costs related to starting a new private school. These loans typically offer favorable loan repayment terms and flexibility regarding how funds are spent.
SBA 7(a) funds can be used for a wide range of private school development costs, including but not limited to:
- Land purchases
- New building and facility construction
- Renovation or acquisition of existing campuses
- Campus equipment and machinery
- Furniture, appliances, and fixtures
- Campus supplies
- Short and long-term working capital expenses
- Refinancing existing debt
SBA loans allow private school owners to build a dream campus so they can focus more of their energy and resources on creating dynamic and inspiring learning environments for students.
What to Expect When Applying for SBA Loans
Texas Gulf Bank has extensive experience helping businesses navigate the application process for SBA loans. We take time to educate potential borrowers on the available loan amounts, equity and collateral requirements, loan terms, interest rates, and loan structures, so you know what to expect.
The SBA loan application process with Texas Gulf Bank begins with an initial review to confirm that borrowers are good candidates for loan approval. We will walk you through the preliminary steps and ask questions to ensure that you meet specific requirements:
- Thorough understanding of the industry, competition, business and financial management, project costs, and related risks
- Required equity contribution
- Sufficient pledged collateral
- Available cash flow to repay the loan, as well as other debts and operating expenses
- Liquid assets in the event of a revenue disruption or cash flow decrease
Potential borrowers that appear to meet initial qualifications will next be asked to submit financial and historical documentation, including but not limited to:
- Completed loan application
- Detailed business plan
- Construction or renovation costs
- Builder information
- Monthly cash flow projections for the first two years of operation
- Three years of personal and business tax returns
- Personal financial statement from the principal owner(s)
- Demographics on future location and expected enrollment figures
- Details on fundraising capital campaigns
Once all documentation is received, our in-house loan team will review your application, address any questions that may arise, and provide a prompt response. If your application is approved, we will work hard to expedite funding to help you meet campus development and construction timelines.
Turn to Texas Gulf Bank When Opening a Private School
With over 110 years of serving the Southeast Texas Gulf Coast area, Texas Gulf Bank has a deep knowledge of the region and the needs of its businesses and residents. When you choose our bank for your lending needs, you will benefit in the following ways:
- Access to our industry expertise.
- Prompt feedback and response times.
- Flexible financial solutions.
- Direct and personal attention in every interaction.
Whether you plan to open a small campus for elementary-age students or a sprawling campus open to all grade levels, we proudly offer a wide range of funding solutions, including SBA loans to private school owner-operators.
Contact us to learn more about loan options for opening a private school in Texas, or stop by one of our nearby locations to speak with a lender. You can also get in touch with our lenders through our contact form to help get started on the SBA loan application process. We look forward to serving your needs.
All Loans Subject to Credit Approval