Between October 2023 and June 2026, 47 lenders approved 134 SBA 7(a) loans to other technical and trade schools, totaling $59,040,900. The median loan was $200,000, above the national $150,300, and the median rate was 10.5%, a little over the national 10.25%. Acquisitions were rare, 8 loans or 6% against 10.4% nationally, but large, at a median of $1,729,500. Start-ups were 17.9% of loans, and there were 21 SBA 504 loans, the program for owner-occupied property and long-life equipment. Lenders decide on enrollment, completion and placement, the school's licenses and approvals, and how prepaid tuition is handled.
| Measure | Other Technical and Trade Schools | All industries |
|---|---|---|
| SBA 7(a) loans approved | 134 | 162,355 |
| Median loan | $200,000 | $150,300 |
| Middle half of loans | $85,825 – $366,050 | $50,000 – $500,000 |
| Loans of $1 million or more | 11.9% | 12.9% |
| Median rate at approval | 10.5% | 10.25% |
| Middle half of rates | 9.5% – 11.25% | 9.3% – 11.25% |
| Acquisitions (change of ownership) | 8 (6%) | 16,849 (10.4%) |
| Median acquisition loan | $1,729,500 | $693,000 |
| Lenders that made these loans | 47 | 1,648 |
| SBA 504 loans (real estate, equipment) | 21 | 16,714 |
Approvals FY2024 – FY2026 to date (1 Oct 2023 – 30 Jun 2026), cancelled loans excluded. Source: SBA 7(a) and 504 FOIA loan records, as of June 30, 2026.
- SBA 7(a) loans approved
- 134 from 47 lenders (Oct 2023 – Jun 2026)
- Median loan
- $200,000 (national $150,300)
- Median rate at approval
- 10.5% (national 10.25%)
- Acquisitions
- 8 loans (6%), median $1,729,500
- Start-ups
- 17.9% of loans
- SBA 504
- 21 loans, median $859,000
Who is in this code
Other technical and trade schools (NAICS 611519) teach job skills outside the separately coded beauty, flight, computer and apprenticeship programs. Commercial truck-driving schools, welding and construction-trades programs, heavy-equipment operator training and allied-health programs such as medical assistant and phlebotomy courses are typical. Some are single-site, owner-run schools with a few instructors; others run several campuses or yards.
SBA lends only to for-profit businesses, so these figures describe proprietary schools. A nonprofit school is not eligible for a 7(a) loan, whatever its size.
The 134 approvals from FY2024 through June 2026 total $59,040,900 from 47 lenders. The median loan supported 6 jobs. Franchised schools made up 6% of loans, a small share: most operators run their own curriculum.
What the numbers say about these loans
The median of $200,000 sits above the national $150,300, and the middle half of loans ran from $85,825 to $366,050. That range buys trucks for a driving school, welding booths and equipment, simulators, classroom build-out, or a working-capital cushion to carry a new cohort. The long tail is real: the 90th percentile was $1,070,000, and 16 loans (11.9%) were $1 million or more.
The median rate was 10.5%, with the middle half between 9.5% and 11.25%. That is slightly above the national 10.25%, which fits loans of this size: SBA caps a variable rate at the base rate plus 6% on loans from $50,001 to $250,000, against plus 3% above $350,000, and on smaller loans with thin collateral lenders tend to price nearer the cap. Only 13.4% of loans carried a fixed rate. The median term was 120 months, the ten-year limit for equipment, working capital and goodwill.
Two figures stand out. Start-ups were 17.9% of loans, a large share for a business that must hold state approval before it can enroll a student, which means lenders are financing the approval process as well as the build-out. And 21 loans went through SBA 504, at a median of $859,000: schools that buy a classroom building, a driving range or a training yard tend to use 504 for the property. See SBA 7(a) vs 504.
What an underwriter actually tests
Tuition revenue looks like good revenue: it is paid in advance, often by a third party. But a lender reads it differently from a sale of goods, because the school still owes the student the program. The questions below come up on nearly every trade-school file.
| What the lender tests | Why it matters | What answers it |
|---|---|---|
| Enrollment trend | Revenue is starts times tuition; a falling start count shows up in cash a term later | Starts by month or cohort for two to three years |
| Completion and placement | Programs that do not place graduates lose referrals, approvals and funding | Completion and job-placement records by program |
| Who pays tuition | Students paying themselves, employers, workforce grants, veterans' benefits and federal student aid each carry different rules and timing | Revenue split by funding source |
| Prepaid tuition | Cash received for training not yet delivered is a liability; a school that spends it early is borrowing from its students | Balance sheet showing deferred tuition; refund policy |
| Licenses and approvals | A school cannot enroll without state approval, and many funding sources require accreditation or program approval | Current approval letters, renewal dates, any findings |
| Instructor and equipment capacity | Growth is capped by qualified instructors, trucks, booths or clinical placements | Staffing plan and equipment list |
Funding source is the item owners most often underexplain. A school that depends on one workforce program, one employer contract or one federal program is concentrated in the same way a manufacturer with one customer is; see customer concentration and debt. Lenders will want to know what share of revenue comes from each source and what would happen if one changed its rules.
Collateral: trucks, equipment and sometimes a building
The hard assets in a trade school are specific. A driving school owns tractors and trailers, which hold value and resell easily. A welding program owns booths, machines and ventilation that are worth much less out of place. Classroom build-out in a leased space is worth almost nothing to a lender. Most loans therefore stand on cash flow, with SBA's required debt service coverage of at least 1.15x and 1.0x globally once the owners' personal finances are counted.
Where the school owns its site, the picture changes. Real estate can carry a 7(a) maturity of up to 25 years, or be financed through 504, which typically asks the borrower for 10% of the project, rising to 15% for a new business or special-purpose property and 20% for both. A lender may treat a purpose-built training site as special-purpose property. Equipment can run up to 10 years, or 15 if its useful life supports it; see equipment financing vs SBA 7(a).
Opening a school, or buying one
A start-up school needs an equity injection of at least 10% of total project costs, plus enough working capital to operate through the approval process and the first cohorts, since a new school usually cannot draw on the funding sources that require a track record. Lenders look for an owner who has run or taught in a school before, a signed lease or site, and evidence that employers will hire graduates.
Acquisitions were only 8 loans, 6% of the total against 10.4% nationally, but the median was $1,729,500 at 9.25%. That is the profile of buyers purchasing established, multi-program schools whose value lies in approvals, accreditation and a working enrollment engine. The difficulty is that those approvals attach to the owner and the institution, and a change of ownership usually has to be approved or re-filed with the state agency, the accreditor and any federal program the school participates in. A buyer's lender will want a clear path to each approval before closing, and the purchase agreement should allow for it; see financing contingencies in an LOI.
- The seller may not stay as an owner, officer or employee after a complete change of ownership, but may consult for up to 12 months, or up to 24 months under SOP 50 10 8.1 from 1 October 2026. For a school whose approvals depend on a named director, plan the replacement early.
- A business valuation from a qualified appraiser is required where the amount financed, less appraised real estate and equipment, exceeds $250,000, and the loan cannot exceed it.
- From 1 October 2026, every change of ownership requires financial due diligence, and acquisitions of $3 million or more excluding real estate need a quality of earnings report. A change of ownership must also show 1.25x debt service coverage on historical results.
- SBA allows no earnout to the seller. Seller financing can count toward up to half of the buyer's 10% injection only on full standby for the life of the SBA loan; see seller notes and SBA standby.
Building the file
Start with Transparent's SBA checklist: 2–3 years of business tax returns, P&L, balance sheet, a year-to-date P&L, a debt schedule with copies of notes being refinanced, and personal tax returns and a personal financial statement for each 20%+ owner. For a school, add the documents that answer the table above: starts and completions by program, revenue by funding source, the deferred tuition balance and refund policy, and every current approval and accreditation letter.
Owners often keep books on a cash basis, which records tuition when received rather than when earned. Lenders will restate it; it is better to show them the adjustment than have them find it. See cash vs accrual financials for lenders.
Show the deferred tuition balance and where that cash sits. A school that can show it has not spent students' prepayments reads as a safer borrower.
Transparent builds the lender package — financing model, lender presentation, blind teaser and underwriting memo — in a day once documents are in, and takes it to the 278 lenders in its book that write SBA 7(a) and 504. Education lending is a narrow appetite, so reaching the right few lenders matters more than reaching many.
Common questions
- How much do SBA lenders lend to trade schools?
- The median 7(a) loan from October 2023 to June 2026 was $200,000, with the middle half between $85,825 and $366,050. Sixteen loans, 11.9%, were $1 million or more.
- Can a nonprofit trade school get an SBA loan?
- No. SBA 7(a) and 504 lend to for-profit businesses only.
- Does prepaid tuition help my loan application?
- It helps cash flow, but lenders treat tuition received for training not yet delivered as a liability. They want to see that it is accounted for and has not been spent ahead of delivery.
- Do my school's approvals transfer when I sell?
- Usually not automatically. State agencies, accreditors and federal programs generally require approval of a change of ownership, and the buyer's lender will want a clear path to each before closing.
- Should I use SBA 504 for a training yard or building?
- Often. There were 21 SBA 504 loans in this code, at a median of $859,000. A 504 typically needs 10% from the borrower, more for a new business or special-purpose property.