Payment of interest and principal will typically begin after the school year begins, with the loans scheduled for full repayment by the end of the school year. Multiple draws are permitted, giving the schools considerable flexibility in scheduling funding. Loan proceeds may be received as early as seven months prior to the beginning of the school year. Long-term facilities loans are typically secured with a mortgage on the school facility. The loans will typically be scheduled to mature in no more than ten to fifteen years.
Qualification is based on the school's written business plan.
The loan amount for working capital loans is primarily based on projected revenue, which is based on projected enrollment. The loan amount for long-term facilities loans is primarily based on the value of the facility, but is also tied to projected revenues. The school must demonstrate its ability to generate adequate income and control expenses within reasonable bounds. It must have sufficient net income to enable payment of principal and interest over the term of the loan. The school's management must have adequate business management skills.