Pre-School, Private School & Montessori School Financing
SBA Loans are excellent loans for construction, expansion, purchase or refinance of a:
- Day care center
- Child care center
- Private school
- Montessori school
The 7a loan, in particular, is well suited for these businesses since it allows financing of goodwill and other intangibles, loan amounts up to $5 million and a 25 year amortization as long as commercial real estate is the largest percentage of the total financing.
In the current lending environment it is much easier to be approved for a refinance or an acquisition than a construction or expansion project as lenders are still being very conservative with anything they perceive to be risky. That being said, construction financing is available (see below) and it is becoming more available the further we get from the lows of the Recession.
Construction financing is definitely available, but the transaction and principals need to be strong. Financing for start-ups looking to build can be problematic as "projections-based" loans are harder to come by, but with enough cash down and the right people involved it is possible.
Existing profitable businesses (including independent businesses) with good cash flow are getting construction funding.
It is easier to finance a name brand such as:
- Goddard Schools
- Kids R Kids
- Discovery Point
- Creative World
- Rainbow Academy
- Rainbow Station
- Childrens Lighthouse
- Kiddie Academy
Private School Financing is available through SBA, but the business must be "for profit" and it cannot have a religious curriculum.
Religious oriented, Non-Profit, Tax Exempt or "501c3" organizations are eligible for financing (including construction and refinancing) and we have a few expert "C3" lenders who specialize in school financing if that is what you need help with.
Please contact us 1-800-414-5285 for more information. (Minimum real estate loan for 501 (c) (3) is $1 million).
Benefits for Private Schools, DayCare & Childcare Centers
1. SBA 504 & 7a loans are some of the few types of commercial loans available given the current state banking and commercial lending.
2. The loans enable you to borrow up to 90% of the project costs and they allow you to put down 10% (or have 10% equity) and finance most of the rest of the costs - including closing costs and "soft" costs like appraisals, engineering fees, surveys, etc.
3. If you create a Green School or build some energy efficiency into your facility you can qualify for more money with "Green 504" loan. For instance, if you already own a few day care centers or pre-schools and you are out of SBA eligibility you can borrow more if you "go green," since the SBA now has an initiative for green building financing.
4. SBA loans are long term, fully amortized commercial loans with no balloons or "calls" which would force you to refinance later.
5. Current rates are at or near all time lows and some fixed rate financing is available.
For more information
about the 7a program, click here
For more information about the 504, click here
Green School Information
By becoming an environmentally friendly institution you would also:
- secure excellent long term financing
- cut your energy costs significantly
- realize some excellent tax benefits
- save money that can be reinvested in the school
- create a healthier environment for your students and teachers
- create a built-in "lab" for teaching your students about alternative energy sources...
- and as a " green school" you might also be able to get some good PR out of it.
Click here for a comprehensive report about Green Schools from the US Green Building Council. It provides great detail about all of the benefits of green school construction.
Please contact us for more information about SBA financing and how it could be a good fit for your day care business or for-profit private school. Call 1-800-414-5285