How to Get a Loan for a School
Establishing a school is undoubtedly a lucrative venture. It is a one time investment which would fetch you assured profits for a long term. However, in order to open a senior secondary school anywhere in India, you will have to shell out a huge amount of money ranging between Rs. 2-3 crores. In a situation when you have to shell out huge amount, you may want to borrow money. For this reason, easy school loans are provided by the Government and a number of private lenders as well. School loans differ from other loans due to their remarkably low interest rates which range from 4 to 10 percent, easy payment options and flexible conditions. So, if you wish to finance your school through loan from any bank or financial institution then, consider the following points mentioned below-
- First of all, search for banks and financial institutions that offers loan for similar ventures. Then, select the best amongst them depending upon your loan requirement. Since you are new in this venture, so look for banks/ financial institutions that indulge in small business financing.
- Once you have decided upon the bank/ financial institution from which you want to get a loan to start your school, the next step is to be prepared with all the important documents required to apply for the loan. The basic documents required for the same are-
- No Objection Certificate(NOC) issued by the State Government,
- Document of Ownership of Land (in case the land is in the name of a Trust/Society),
- Trust Deed and ITR of all trustees( specifying their identity verification documents as well) )and
- A loan request document.
Moreover, if you are taking up a franchise then you need to submit a photocopy of the Franchise Agreement Document as well.
- Before you approach the banker, be thoroughly prepared. You need to prove the banker that granting you loan will be a fruitful venture for both the parties involved. You should possess the convincing power to assure the banker that it is low risk proposal. Basically, you need to prove your credibility i.e. you need to assure them that you are opening a school for the benefit of the society and you will return the amount in a stipulated period of time.
- The next step is to visit the bank and complete the formalities. For this, you need to procure the loan application form and fill it as per the directions given. Also, attach the copies of the aforesaid documents.
- Now, be prepared to answer the questions confidently that the banker will put up. The questions asked by the banker would include- the amount of loan required, the duration of loan period, purpose of getting the loan, mode of repayment i.e. EMI via cheque, cash or SI (Standing Instruction) etc.
- Ensure that all the documents are printed and not handwritten. This is because; the handwritten official papers give an unprofessional and outdated look. Also, present all the documents in a business file.
Apart from the aforesaid points, it is also noteworthy that it is not an easy task to get your loan sanctioned from the bank unless you convince the banker. Lastly, keep this in mind that getting a loan for the first time is not an easy task as the bankers and the financing institutes grant loans easily to the old customers in comparison to the new ones because of the risk of credibility. So, to make your stand stronger, give reference of a friend or a relative to the banker. However, if you still find this step of opening a school i.e. getting a loan sanctioned from the bank/ financial institution, to be difficult, then it is better to opt for a school franchise. SHEMFORD Futuristic Schools is a renowned name in the senior secondary education. With over 50+ branches in India and Abroad, SHEMFORD Futuristic Schools offers the best franchise prospects. So, hurry, don’t loose time. Fill this Franchise Application Form and get associated with the pioneers in education sector.