SBA 7(a) Charter School Feasibility Study in Texas

The national leader, with large loans

No state lends more to schools through SBA 7(a) than Texas: it ranks 1st among states for school loans, counting charter schools, with 87 loans and $113.5 million in gross dollars approved. Inside Texas, though, the class sits only 23 of 39, so schools are a specialist corner of a very large book. The standout metric is the median. At $766,000 it is 1.63x what schools borrow nationally, and the center of the Texas book stretches from $231,000 to $1.8 million. Texas schools borrow heavily, and a lender should ask what the money builds. The printed franchise share is 26.4%.

MidFirst Bank holds 7 loans and BayFirst National Bank 6. A tie at 5 closes the list: Hancock Whitney Bank, with The Huntington National Bank level. No bank dominates, and the table is simply today's holders as SBA reports them; it cannot say how any of them judges a school. Collin and Harris counties tie at 16 loans, Dallas follows with 9, and Tarrant and Williamson have 7 each, with Denton and Fort Bend at 6. Lending is therefore concentrated in a handful of counties. Volume peaked at 18 loans and $26.7 million in FY2018, fell to 5 loans in FY2022, and ended at 5 loans and $5.4 million in FY2026.

Floors, and a loss record that did not stand out

The cancellation floor is 6.9%, with an identical ceiling. Charge-offs in the cohort of 49 loans funded from FY2017 to FY2021 stand at a floor of 6.1% to date, and the five-year measure is the same 6.1%. Because some loans remain open, these are minimums. Our distinctness margin picked out the median only, which means that losses and cancellations look like Texas lending generally and schools nationally, even though a floor of 6.1% still deserves a lender's attention in a class where a single closure can end a loan.

Coding limits and what a study must prove

This data cannot isolate charter schools, which sit under the same industry code as private schools. SBA does not lend to most charter schools because they are nonprofits, so the loans counted here are mostly the for-profit and privately operated minority. A Texas school study must therefore show the operator's structure and eligibility early. It should test enrolment demand in the neighborhood, competing public and private options, tuition or funding stability, and the facility itself: cost against appraised value, conversion needs, and safety and code compliance. Debt service coverage should stay positive in a year when enrolment falls short, and the appraisal should recognize that a school building is a special-purpose property.