A loan is not free money. You repay it with interest, and most small-business lenders want you to personally guarantee it. Talk to a CPA before you sign.
Step 1: Know who will even look at you
- For-profit only: SBA 7(a), 504 and microloans. The business must "Operate for profit." Nonprofits are excluded by regulation (13 CFR 120.110). ACC Capital's microloan is "available to all for-profit small businesses."
- Any legal entity: The Lending Lab lends to an LLC, a corporation or a nonprofit (even with a 501(c)(3) pending). "Sole proprietors are not eligible."
- Christian schools and churches: America's Christian Credit Union, AdelFi, and denominational funds like LCEF. Membership is usually required.
Step 2: Gather what lenders ask for
These come straight from lenders on our list.
| Item | Who asks |
|---|---|
| A registered entity with its own EIN (free from the IRS) | The Lending Lab ("legally organized entities with their own EIN") |
| A business bank account in the school's legal name, with no personal spending mixed in | The Lending Lab |
| Books reconciled monthly; formal payroll | The Lending Lab |
| A five-year financial model in Excel, with a repayment schedule | The Lending Lab |
| Signed tuition contracts with deposits | The Lending Lab |
| A lease, letter of intent or written facility plan | The Lending Lab |
| $1M general liability insurance | The Lending Lab |
| Collateral; a personal guaranty; for startups, "an alternative source of income" | Communities Unlimited |
| A personal guarantee from every 20%+ owner | SBA 7(a) (13 CFR 120.160) |
| Credit history (650+ preferred, "not a cutoff") | The Lending Lab |
| About 3 years of financial statements | AdelFi (established ministries) |
Step 3: Write a business plan a lender can read
SBA describes two kinds:
- a traditional plan, which "can be dozens of pages long";
- a lean startup plan, which is "typically only one page."
For a school, a lender mostly wants four things:
- Who you serve and why families will pay. Waitlists and signed contracts beat surveys.
- Your enrollment ramp: students per year for five years, with tuition per student.
- Your costs (A startup budget for a microschool (with a template outline)), plus the loan payment.
- When cash comes in. In Arkansas, EFA deposits reach families quarterly, starting in late August.
Free help:
- ASBTDC offers "one-to-one confidential consulting … at no charge" from 7 Arkansas offices.
- SCORE mentors are free.
- ACC Capital includes free coaching with its microloan.
- SchoolStack Budget (from The Lending Lab) is a free five-year model while in beta.
Step 4: Pick the right size
Borrow only what bridges you to steady tuition. Arkansas options by size:
- Kiva: $1K–$15K at 0%. Northwest Arkansas founders can go through Kiva NWA.
- ACC Capital: $5K–$50K.
- SBA microloans: up to $50K through Communities Unlimited, FORGE, LiftFund or People Trust.
- The Lending Lab: $10K–$50K. Year 1 is interest-only.
- Communities Unlimited: up to $200K.
- SBA 7(a): up to $5M. SBA 504 is for buying a building.
If your own bank says "almost," ask it about ADFA's loan guaranty. It guarantees 10–50% of the bank's loan.
Step 5: Apply and follow up
- SBA Lender Match is "a tool to help businesses find lenders in their communities." It isn't an application.
- Apply to one or two lenders at a time, and answer their questions quickly.
- Expect a timeline. The Lending Lab's screener takes about 15 minutes, and review takes 2–4 weeks.
Common reasons small schools get a "no"
- Mixed money: personal and school spending in the same account.
- Enrollment you can't prove: no signed contracts.
- A budget with no assumptions behind it, or one in a PDF instead of a spreadsheet.
- No plan for the months before EFA money arrives.