Charter School Funding Sources: Receivable Sales vs. Traditional Bank Loans

At Charter School Capital, we are 100% dedicated to the charter space and to enabling the success of charter schools. Schools often have difficulty finding charter school funding sources for operations and growth.
One method of financing widely used by many industries is receivable sales. This reliable and flexible transactional process, pioneered by Charter School Capital for charter schools, provides access to capital needed to support operations, facilities, programmatic expenses, or other obligations.
To make things a bit easier, we wanted to help clarify some of the differences between accessing capital with a traditional bank loan or line of credit versus our receivable sales product with regards to access to money, cost, and risk.
Read on to get answers to the most commonly asked questions around options for charter school funding sources.

Access to Money

Who qualifies for funding?

With a traditional bank loan or line of credit, it’s limited and depends on the school’s credit history.
With Charter School Capital’s receivable sales product there is universal access as greater than 90% are approved for funding.

How much can be approved?

With a traditional bank loan or line of credit, it really depends on your credit rating which can also restrict the amount awarded.
With Charter School Capital’s receivable sales product, the amount is only limited by your school’s budget and we can fund all qualified receivables.

Can a lender/purchaser increase amount of contract?

With a traditional bank loan or line of credit, it can be difficult, time-consuming, and also require credit committee approval.
With Charter School Capital’s receivable sales product, it can be increased quickly and easily and the amount available will be based on qualified receivables.

Can you get funds when needed?

With a traditional bank loan or line of credit, it depends and the amount awarded and access to the funds can be restricted.
With Charter School Capital’s receivable sales product, the answer is yes, we can fund all qualified receivables when you need the money.

Cost

How much will it cost?

With a traditional bank loan or line of credit, the cost is not known until the loan is paid. In addition, state delays can cause additional interest, late fees, and penalties.
With Charter School Capital’s receivable sales product, the cost is known upfront and fixed, even when state payments are delayed.

Budget Planning –Dollars per Student

With a traditional bank loan or line of credit, the cost is unknown and harder to plan because of the fact that the cost is uncertain.
With Charter School Capital’s receivable sales product, the cost is fixed and certain. Having more predictable costs makes planning more reliable.

Risk

Who is obligated to pay?

With a traditional bank loan or line of credit, the school is obligated to repay debt.
With Charter School Capital’s receivable sales product, it is a state obligation, not a school debt.

What is at risk if the state delays payment?

With a traditional bank loan or line of credit, the school is at risk for interest costs, late fees, and possibly even default if the payment is delayed because the state is late.
With Charter School Capital’s receivable sales product, if payments are delayed at the state level, there is no recourse to the school and Charter School Capital assumes the risk.

Click here to download the free one-page PDF datasheet on these two charter school funding sources!

The Charter School Growth Manual
Whether you’re just beginning the process of starting up a charter school, looking to expand or trying to prioritize your next steps, download this guide to get expert tips and pitfalls to avoid as you grow.
For this charter school resource guide, we turned to our wide network of charter school experts for best practices and strategies for success at every stage of maturity. All of the advice in this book comes from experienced charter school leaders who have been where you are now—they understand what you’re facing and the pitfalls to avoid.

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Charter School Financing: Myths vs. Facts

From funding your growth, managing deferrals, to investment in facilities, get ahead of the game knowing these five charter school financing myths & facts!

MYTH: Charter schools should use their reserves to finance growth instead of looking for outside financing options.
FACT: Using outside financing to facilitate growth can make a charter more financially secure in the long run and pay for continued growth without depleting cash reserves.

MYTH: Growth capital should only be used in the case of state funding delays or deferrals or as a last resort.
FACT: Growth capital is incredibly flexible and can be used for operational growth, program enhancements, technology upgrades, school expansion, etc.

MYTH: Running a charter school is not like running a business.
FACT: A charter school is a business and making smart, informed business decisions will benefit your school’s viability, financial health and overall growth.

MYTH: Bonds are the best way to fund a facility.
FACT: Only 12% of charter schools have accessed bond financing. The process of securing a bond is often time-consuming and can incur hidden fees from audits, trustees and rating agencies.
Source: LISC, Charter School Bond Issuance, 2015

MYTH: Charter schools should own their facilities.
FACT: You’re in the business of educating students, not owning and managing real estate. There are many other financing options that will give you control and security over your facility.

If you’d like to download the PDF version of this infographic, click here.

Charter School Budgeting Best Practices: Don’t Just Survive–Thrive!
Since the opening of Charter School Capital 10 years ago, we’ve reviewed thousands of charter school budgets. Year after year, we see common mistakes many charter schools make when budgeting for their academic year. Hear from charter school finance experts as they give you a breakdown of budgeting best practices to help you have a financially successful academic year. Don’t just survive — thrive!

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Charter School Capital Funding Enables Skyline Education to Grow and Provide the Resources Needed for Their Students

Read this school spotlight to learn how Charter School Capital funding helped Skyline Education when they needed it most.

Providing a quality education to at-risk students often requires multiple resources. One-on-one instruction with teachers, access to good computers and customized lesson plans for students with special needs are just a few of the tools necessary to help children from underserved communities reach their potential. That is the formula behind the success of Skyline Education, a charter network in Arizona.
The multi-disciplined approach to education that Skyline’s six campuses provide “comes at a fairly high up-front expense,” says KJ Weihing, vice president of finance at Skyline Education. “We wanted to make purchases but didn’t have the up-front funding. That’s why we called Charter School Capital; they helped us get that short-term funding.”
Skyline opened its first campus in 2000, but it wasn’t until 2009 that the charter began to experience rapid growth. That year, the charter added two new campuses to its network, another in 2010 and two more in 2012. The network now serves more than 1,000 students in socially and economically diverse communities, including the Gila River Indian Community.
Such dramatic growth these past few years created a real need to access working capital, explains Weihing. The charter network knew that it would be receiving its funding, but given the uncertain payment schedule from the State of Arizona, they didn’t know when. School administrators knew that they needed some form of help to even out their budget throughout the year but were very wary of outside funders until they met Charter School Capital.

“We wanted to make purchases but didn’t have the up-front funding. That’s why we called Charter School Capital; they helped us get that short-term funding.”
~KJ Weighing, Vice President of Finance, Skyline Education

“I was impressed with the fee structure,” says Weihing. “A lot of times there are organizations that will lend for 20% interest because they know you can’t get funds anywhere else. Charter School Capital’s fee structure was not outrageous.”
But the relationship Skyline has developed with Charter School Capital is rooted in much more than just financial terms. Weihing would recommend to any charter school needing funds that they just “start the process,” stating that the two organizations have formed a real partnership dedicated to the success of Skyline Education.
“Last year, we wanted to make new computer purchases for one of our schools, but we didn’t have the current funding on hand to make that happen. So we used Charter School Capital to provide us with some short-term, immediate funds in order to get those computers into the classroom sooner than we would have been able to if we were waiting on funding,” concludes Weihing. The whole process has been “extremely seamless, quick and easy; I’m glad I did it.”

Since the company’s inception in 2007, Charter School Capital has been committed to the success of charter schools. We provide growth capital and facilities financing to charter schools nationwide. Our depth of experience working with charter school leaders and our knowledge of how to address charter school financial and operational needs have allowed us to provide over $1.6 billion in support of 600 charter schools that educate 800,000 students across the country. For more information on how we can support your charter school, contact us!

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The Top Five Financial Mistakes Charter Schools Make: And How to Avoid Them

Did you miss our live session at the National Charter Schools Conference; The Top Five Financial Mistakes Charter Schools Make: And How to Avoid Them? Not to worry! We wanted to make sure to share the highlights from this session right here on the Charter School Capital blog. We were honored to have an outstanding panel of charter school experts whose depth of experience brought so much value to this presentation.

Tricia Blum Head of Business Consulting, Charter School Capital

Margie Montgomery Founder, Desert Star Academy

Sharon Thompson, Chairman of the Board, Wayne Academy

Michael LaRoche Founder/Executive Director, SALTech

The Five Mistakes

The panelists began by outlining the top five mistakes:
1. Not Recognizing Your Schools is a Businesses
2. Being Unprepared for the Unexpected
3. Underestimating the Importance of Finances
4. Losing Sight of Your Mission
5. Not Maintaining Strong Relationships

How to Avoid the Top Five Financial Mistakes Charter Schools Make

Here’s a bit more detail on each mistake and the action items you can take to avoid them:

MISTAKE #1: Not recognizing that your school is a business

ACTION STEPS
1. Be the superintendent (not a principal)

Not just curriculum and teachers
Its endless hard work
You will be challenged in ways you never thought possible

2. Know your customer

All your stakeholders are customers:
- Parents
- Students
- Community
- Authorizer
- Staff

3. Be the boss—the buck stops with you (literally)

Everything impacts your financials (especially mistakes)
You are responsible for it all
Find a mentor

SOLUTION: REMEMBER, YOUR SCHOOL IS A BUSINESS

MISTAKE #2: Being Unprepared for the Unexpected

ACTION STEPS
1. Beware the lawsuit and bad actors
2. Keep a strong, updated wait list

Sometimes your enrollment stream dries up or decreases substantially
- Military bases/large employers, new schools, bad PR

3. Facilities have tripped up more than one great charter schools

Landlords aren’t always your friend: Know and understand your lease and the numbers behind them
Start looking for larger or better facilities now

4. Beware the tenacity of angry employees and parents

Create and maintain good public perception
- Marketing/PR

SOLUTION: PREPARE FOR THE UNEXPECTED

MISTAKE #3: Underestimating the Importance of Finances

ACTION STEPS
1. Make a plan, work the plan:

Budget forecast
- Don’t underbudget
- Don’t overspend
  *When in doubt do without
Cash flow
Budget to actuals
Have a contingency plan

2. Beware the claw-back

Forecast enrollment realistically
- Nobody will correct you but they will take your money

3. Hire a charter school financial expert

Internally & externally

SOLUTION: REMEMBER, SUCCESS REQUIRES MONEY

MISTAKE #4: Losing Sight of Your Mission

ACTION STEPS
1. Know your end game—its’ your mission and vision

Tie all financials and operations back to your goal or consciously make new goals (redo mission/vision)

2. FAB (be Ferocious About your Boundaries)

Said differently, Trust but verify
- Experts

3. Enrollment, enrollment, enrollment

SOLUTION: KEEP YOUR EYE ON THE PRIZE: YOUR MISSION

MISTAKE #5: Not Maintaining Strong Relationships

ACTION STEPS
1. Authorizers: Aren’t always your friend

A “fine” relationship with your Authorizer suggests no relationship with your Authorizer
- Calendar regular contact with staff, ED/superintendent, Charter Board
- Toot your own horn
- Show up to Authorizer events

2. Your Board of Directors: know your governance

You report to them–cultivate them
Lean on them for good and bad—they should be involved not just aware
Organized and agenda-d monthly public meetings

3. Experts: find them, pay them-keep the good ones

Consultants, thought leaders, business partners

SOLUTION: HAVE FRIENDS IN ALL THE RIGHT PLACES

To watch the video of the live presentation, you can find it on our Facebook page.
To download a printable PDF datasheet, click here.
We hope that this has been helpful and valuable information! We’d love to read your comments and suggestions, so please add them in below.

Charter School Capital is committed to the success of charter schools and has solely focused on funding charter schools since the company’s inception in 2007. Our depth of experience working with charter school leaders and our knowledge of how to address charter school financial and operational needs have allowed us to provide over $1.6 billion in support of 600 charter schools that educate 800,000 students across the country. For more information on how we can support your charter school, contact us!

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CHARTER EDtalk: Charter School Budget Best Practices

Check out this CHARTER EDtalk for tips and tricks on charter school budget best practices! Janet Johnson sits down with Matt Percin, both from Charter School Capital, to learn about the importance of being flexible and adaptable as a startup school and the increased budget-planning power you have as a more mature school. You’ll also get key insights on vendor management as you work through budget ebbs and flows. See the short video below.

Read the complete transcript here:
Janet Johnson (JJ): Welcome everyone to our next CHARTER EDtalk with Matt Percin, who is the manager of Charter School Capital’s financial analysis and risk. Can you tell me a little bit about what you do?
Matt Percin (MP): Sure. Simply put, what our team is responsible for is mainly understanding how much funding our clients could need and then trying to actually map out a plan of what they need or what we can provide so it’s a cohesive relationship for us. And then the other thing we’re doing is actually valuing what we’re going to buy. So we’re valuing the future revenue streams. We’re looking at purchasing for the school for financing as well as for real estate business. Figuring out what schools can afford … helping schools map that out.
JJ: So, you do actually work with the schools a little bit. Oh, that’s cool. Because I have a feeling a lot of schools don’t have people with your experience on staff. Is that correct?
MP: Sometimes it’s nice if they have some kind of back-office provider (BOP) who has someone we can dialogue with. But sometimes we take a more active approach with our schools that don’t [have a BOP]. So, it’s helpful.
JJ: There’s a couple of different types of schools that we work with here: startup schools, and then a little bit more mature – or growth-oriented – schools. Can you tell me a little bit about the differences between the approach for financial support for each?
MP: For sure. I would say probably the three things that we could emphasize for a startup school versus a growth or mature school is flexibility, variability, and then the power and efficiency you have as a school.
JJ: So can you tell me a little bit about what is flexibility versus variability?
MP: So, if we say variability for a startup school, you’re actually a lot more variable in the sense of you don’t have any history yet, so you have no backlog to figure out how last year worked out. You have to be a lot more adaptive to what happens … because you might say, hey, we think on our petition budget, we’re going to open up with 100 kids. But you may open up with 125 or 75. So then figuring out how to quickly adapt to your budget and adjust accordingly, you just have to be a lot more reactive as a startup school.
JJ: So all the planning in the world, you still have to kind of be nimble and you help with that.
MP: Exactly. You know, if you’re a growing school or a school that’s been mature or been around for five years, three years, somewhere in that realm, you have a baseline and you knew how things happened last year and you have less variability in your student count because you’ve established yourself in the market. You have, the students that already come to your school. And they may continue on in your school so you have a lot more understanding of what your baseline is going to look like for future years.
JJ: So you’re more predictable.
MP: Yes. So, then the other, the other thing I talked about was the flexibility. So the flexibility or sometimes you can think of it as the power you have as a school, if we can use that word.
JJ: I like that word!
MP: So, if you’re a startup school, once again, you just have to be more flexible. You aren’t flexible yourself yet, [but] you just have to become more flexible. So, that could mean adjustments up front, changes down the line. It’s really all about reaction like we said before.
JJ: So are we managing expenses more than we’re managing revenues at this point?
MP: It’s definitely both, but I think everything starts with your student count, which is what leads to your revenue, and then you have to adjust expenses accordingly.
JJ: So it’s as important to keep happy students and as it is to bring them in.
MP: Exactly. Then, obviously, if you’re mature or growing school, the power you have is that you have established relationships with your vendors: the people that supply your technology, or your books or your landlord. You have a relationship with them. If you have any challenging months or times of the year, you have the ability to use that relationship and utilize it for your advantage and maybe say, “Hey, in the first three months of the year, my revenue and my cash is tight, can I push out maybe some expenses to later in the year?” Then, you have that type of power upfront for your vendor management.
JJ: Love that idea of power around vendor management. Do you find that vendors oftentimes will respond to that?
MP: Definitely. I think the key is always communication upfront. It’s like anything in life, right? If you give someone the forewarning with enough time, the relationship is a lot easier to maintain and establish.
JJ: So, flexibility when you start, then you become more dependable and your variable expenses are more predictable, and you establish yourself as a reliable partner to others, and you have more power as you grow up. And the key to all that is your student revenue should exceed your expenses.
MP: Exactly. Awesome. Very well said.
JJ: Thank you. I know cashflow planning is a big consideration for a lot of schools. Can you talk about how that affects your budget? You talked a little bit about it before, but can you dig into a little bit about what should charter leaders look out for when they’re planning their cash flow?
MP: I think the key is that sometimes cashflow planning gets overlooked. Everyone knows that for any business—which a charter school is—you have to have a budget, right? But sometimes people forget to look at things from the actual “ins and outs” perspective, which is what a cash flow is. A cash flow is essentially your budget, but it’s broken out usually looking 12 months ahead. So, you can figure out how everything looks monthly or sometimes even weekly. So then you can start to figure out really the questions you want to ask yourself are … What are my challenging times of the year? Because if you figure out where you’re challenging times the years are, then you can use everything we just spoke about – your vendor management and all your accounts payable management – and you can forecast that upfront. And then it starts the conversations with your vendors. And if you have to look for financing, you know when you might need it. So basically, thecash floww is helpful because it gets you looking and becoming more proactive in the future.
JJ: And tools for managing cashflow or or resources for managing cash flow. Those are people like your back office provider?
MP: Yes.
JJ: But what if you don’t have one? Does that mean Charter School Capital helps you, if you’re working with us?
MP: Yes, we do that all the time. Even if they do have a back office provider, sometimes it’s a relationship we work in tandem with the back office. It’s usually a partnership is how we always work on that type of thing.
JJ: Yeah, because I don’t know that a lot of schools have [one]. Maybe they do, but it’s been our experience, I think, that they don’t have as much visibility as they should into cashflow.
MP: I agree. Sometimes it just gets overlooked, but the fact is that it’s a very important tool for many reasons. It’s important to look at.
JJ: Good. So if a charter leader is looking for new financial support for a school, what should they be looking at? Who should they be looking at? What are the steps that they should be taking?
MP: That’s a good question. I think what you want to start with, is figuring out how much you need. Right? So, in order to do that, I would say you probably need the same document we just referred to, which is the cashflow. Because then you can start to figure out if there’s some type of gap in your cash flow or you don’t have enough actual cash in the system to pay something important, rent or some big bill that’s coming up. Then you actually know. So, I would say you first want to establish how much you need and then with that, when you need it.
JJ: And, do we help with that? Is Charter school capital help with that? Even if you’re not doing business with us yet?
MP: We do. I think schools generally know if they think they’re going to have problems with cash, but they might not be as honed in on exactly how much they need and when—and then in the future, how whatever financing they do get is going to affect them. So, we try and help show them the path. Always, in advance. We like to look at things, pretty far in advance – six months, 12 months – to help schools map out where they can go, and what they want to achieve.
JJ: Any, any last recommendations or advice for charter leaders from where you sit?
MP: That’s a good question. I would say if it kind of relates to what we just spoke about, but it can be applied to anything. I think the biggest baseline driver for everything is the student count. But it’s very easy to know student count and how much you get paid for the year. But it’s more important to understand—when those students come on board—when does the actual receipt of the revenue come for those students. Because, oftentimes (and all across the United States where there are charters) there’s some lag from when new students come versus when the actual payment for them comes. It could be three months, it could be nine months. So, then you have to figure out as you add new students, how you pay all the onboarding costs for new teachers and new books for those students. So, if you have that mapped out, it sets everything else off much better.
JJ: Matt, thank you so much. We really appreciate your help today. And for more information on charter school budget planning and tips, Charter School Capital has a whole bunch of resources on the website at www.charterschoolp.wpengine.com/resources . So, come visit us and find out more. And if you have a real question about budgets, Matt might help you out.

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Find Out How to Avoid the Top Five Financial Mistakes Charter Schools Make

Our upcoming session at the National Charter Schools Conference is going to answer one really important question, “How do we avoid the top financial mistakes that charter schools make?” We are so honored to have an outstanding panel of charter school experts join us to share insights from their years of charter school experience.

Tricia Blum Head of Business Consulting, Charter School Capital

Margie Montgomery Founder, Desert Star Academy

Sharon Thompson, Chairman of the Board, Wayne Academy

Michael LaRoche Founder/Executive Director, SALTech

So, what are the five mistakes?

1. Not Recognizing Your Schools is a Businesses
2. Being Unprepared for the Unexpected
3. Underestimating the Importance of Finances
4. Losing Sight of Your Mission
5. Not Maintaining Strong Relationships

We chatted briefly with two of our panelists, Michael LaRoche, the Founder and Executive Director at SALTech and Margie Montgomery, Founder of Desert Star Academy, asked them a few questions in advance of their participation on our panel.

Q: Can you briefly describe your history with Charter School Capital (CSC) and why you are excited to participate with Charter School Capital at the National Conference?
Michael LaRoche: CSC was always there to support SALTech’s mission for facility financing from day one. We developed relationships with the CSC staff in early 2013, during our separation from the Education Management Company. SALTech experienced significant cash flow problems soon after construction which would have closed most schools. CSC stood by SALTech during the good times and challenging encounters along the way. I am very excited to share our journey and the support CSC provided to enable success.
Margie Montgomery: As the founder of Desert Star Academy, I have been a client of CSC for four years. First, with working capital. CSC provided funding for Desert Star Academy to open the charter to purchase furniture and the initial curriculum. After two years, CSC’s Facility team purchased land from Desert Star to build an 11,000 square foot building that housed our new middle school
I am extremely excited to participate with CSC at the conference because this company provides resources and opportunities for charter schools to grow and expand. They also provide support to each of the schools to improve and maintain financial stability. It is truly an honor and privilege to be a speaker with them at the conference.

Q: What do you hope people take away from our session “Top Five Financial Mistakes Charter Schools Make . . . And How to Avoid Them”?
Michael LaRoche:

1. Not Recognizing Charter Schools are Businesses
Ensure the school leadership and the Board have a shared vision for the school and are on the same page. They need to collaborate and agree on legal, financial, marketing, staffing, budgeting, construction and growth opportunities that matter to the school. They must also have a contingency plan in place for when things do not go as expected. Moreover, they must seek innovative ways to outperform the competition continuously.
2. Poor Enrollment Forecasting
Work with a financial expert to carefully understand how expected enrollments affects the entire school operations. Nothing is 100% guaranteed and the perfect time is always now. You must take the financial walk!
3. Sales & Marketing
Most charter schools do not have the resources to hire a sales or marketing team to support their enrollments efforts. You are the chief salesperson for your school. Therefore, you must scaffold your sales and marketing thinking to your staff quickly. Help your staff to understand that everyone is a salesperson for the school. Help your staff to look for trends and opportunities in the education marketplace.
4. Build Strong Relationships
You can not do it alone. Innovation is not the leader or Board responsibility. Make the connection with businesses and organizations that share your vision and mission that will add relevance to your school. Keep your parents and students informed of your goals, they are your first line of support and sometimes your only line of support.
5. Ferocious Around the Boundry
The school leadership and the Board must plan for and respond quickly to any threats made against the school, which includes the following: The school district, state, parents, students, staff, other organizations and social media to mention a few.
Margie Montgomery:
1. It is not enough to open a charter school as a building principal you MUST have superintendent experience.
Running a charter school is a business. If you are the lone person at the top running the school and directing your board you must have business experience. As the school leader, you are managing cash flow every week and making financial decisions daily. Be prepared.
2. Plan for the unexpected.
Talk to many charter leaders about the first year of business in respect to the hills and valleys. Understand the mishaps that can occur and be prepared to handle them from a financial standpoint to staff and curriculum issues. Over plan in every aspect from sound policies to financial planning, as once the doors open you are putting out fires.
3. Have financial reserves from day one.
Plan to have cash reserves from day one and budget for a set amount to go to the reserves every month. This will get you through the unexpected and have a build up for growth. Your incomes come in monthly and growth expenses occur in the few months before school starts. Reach out to charter school capital during your planning phases to partner with them for financial stability. Once funded, immediately set up a cash reserve account.

Q: What are you most looking forward to at the conference?
Michael LaRoche: SALTech Charter High School has a great story of resilience, belief and an impressive academic and financial track record in helping and supporting at-risk youths for over 15 years. I was privileged to have a front-row seat to bear witness to SALTech journey so that others can benefit.
Margie Montgomery: I am looking forward to seeing the team and sharing my experiences with charter holders outside of my local and state area. Running a charter school is such an exciting, yet challenging opportunity for everyone involved and if I can assist and encourage others to be successful I will have achieved another professional goal.

And, this is just a sneak peek at the wealth of knowledge our panelists will be sharing! We want to sincerely thank Micheal, Margie, and our other esteemed panelists for their partnership, leadership, and willingness to share their experiences to help support other charter leaders.

W e’ll be streaming this session on Facebook Live from the National Charter School Conference on Monday, June 18th at 2 pm CT or (12 pm PT). Don’t miss it!

And check back on our blog late on June 18th to download a handy one-page PDF of the five mistakes.

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San Tan Learning Center Grows with Charter School Capital Financing

In this school spotlight, we’re so proud to share how Charter School Capital financing helped San Tan Learning Center, an Arizona charter school, fund their growth and provide the stability they needed so they could stand alone.

San Tan Learning Center began its third year partnering with Charter School Capital to manage the school’s incredible growth since the school was formed in 2006. In that time, the school has grown from 250 students housed in a single 20,000 square foot campus to more than 650 students on two campuses totaling more than 60,000 square feet. That type of “whirlwind growth,” as Dr. Kris Sippel, Principal of San Tan Learning Center, refers to it, means that the school has increased their need for ongoing access to growth capital for more desks, computers, and space to house the students.
A few years ago, a lapse in funding by the State of Arizona combined with the school’s rapid growth meant the staff at San Tan Learning Center, based in Gilbert, Arizona, found themselves wondering where the money was going to come from to meet their changing needs. “I remember sitting in my office thinking ‘how am I going to get that $200,000 that I need’?” recalls. Sippel. “I was going through the mail and came across a postcard from Charter School Capital so I put in a call and a staff member called me back right away to talk about our needs. Their team got me comfortable with the process, pulled the documents together and presented to our Board of Directors.”

“It is a big relief to know that, with Charter School Capital, our organization can stand alone.”
~Dr. Kris Sippel, Principal

Dr. Sippel recognizes that at first, his board was hesitant. “They were worried about fees and paying back a loan with interest,” says Dr. Sippel. However, once the board understood that the funds provided by Charter School Capital were not a loan, the solution was embraced. “This doesn’t have all the rigmarole of a loan.” Dr. Sippel explains, “when I need funds, I get an email from Charter School Capital, process the paperwork, and provide the documents to get the funding –it’s so streamlined, it’s beautiful.”“It is a big relief to know that, with Charter School Capital financing, our organization can stand alone.”Dr. Kris SippelPrincipal
Growth and success for San Tan Learning Center means that they are able to provide quality middle and K-6 education to local students in their community.Dr. Sippelknows that what the school has to offer is unique,“we are a very family-oriented community; it just feels different at San Tan.” And he recognizes that Charter School Capital offered the school an equally unique experience, “Charter School Capital has done such a good job making us feel a part of something –that’s rewarding. You don’t get that feeling at a bank –the relationship piece just isn’t there.”
Dr. Sippel concludes with some advice for other charter schools experiencing rapid growth and facing financial concerns, “Ask yourself, ‘who’s going to sign a bank’s personal guarantee?’ Because it is a big deal; at least it was for me.” But Charter School Capital financing changes all of that. When describing the process, Dr. Sippel refers to something he calls the “3 F’s”: “Finding. Funding. Fast. That’s what they did the first time and that’s what they continue to do.” “It is a big relief to know that, with Charter School Capital, our organization can stand alone.”

The True Impact of Charter School Capital Funding

At Charter School Capital, we believe in the power of charter schools and their leaders to deliver quality education to families across the country. And we’re proud to provide the reliability and stability charter leaders require as they walk their journey to better educate more students today—and in the future. We were honored to get some of our customers and partners to share with us the true impact of charter school capital funding on their students and schools in this short video.
We are the nation’s leading provider of charter school financing including working and growth capital as well as facilities financing. Over the last 10 years, we’ve put more than $1.7 billion to work for 600+ charter schools educating more than 800,000 students across the country. Not only do we provide funding for charter schools, we also provide strategic planning for growth, financial planning, legislative and state budget insights, charter school resources, and an ongoing commitment to charter schools. To learn how some our clients and partners have been impacted by working with us, take a look at the video. The transcript can be found below.

Intro Speaker 1: I think funding for education, in general, is difficult, but in charter schools, we have some additional problems. One example is the hold-back situation
Intro Speaker 2: For every dollar we’re spending, we’re suddenly only getting sixty cents back during the current year with the promise that next year we’ll pay you back. I mean that was a serious problem for us.
Intro Speaker 3: We’ve made commitments to students, parents, and teachers to provide a high level of education and, unfortunately with the state of the economy and the state of deferrals, we find ourselves having to find different options.

CHALLENGE ACCEPTED…

NOT A BANK

Ricardo Mireles, Executive Director, Academia Avance (RM): Starting the relationship with charter school capital is different from what we have experienced with other financial institutions and that they’re very focusing on the viability of the school going forward relative to the charter.

Frank Stucki, Chairman of the Board, Paladin Academy (FS): They have educators on staff, they understand the process, understand what running the school means, so they were different than any other lender that we had talked to. That was refreshing and important.
Dr. Bill Spira, Executive Director, Augsburg Fairview Academy (DBS): That’s something I think that is probably different with most banks, is that they really haven’t gotten the message that charter schools are a dynamic small business.
Dr. John Biroc, Principal, Charter High School of the Arts (DJB): You know, banks, financial institutions, and that seems to me like an awful lot of work that an awful lot of effort. We have bigger fish to fry. We’re trying to educate kids. And Charter School Capital has always stated to us in one way or another, we believe in you.
FS: Their commitment to the industry of charter schools is that I don’t. I don’t know anybody else out there doing that and that’s very, very important.

A RELIABLE OPTION

Becky Meyer, Executive Director, Academy for Science & Agriculture (BM): I never looked at selling receivables previously. Once I understood what it was and how we were going to guarantee our money, then it became a pretty easy process.
Paul Okaiteye, Director of Business Services, New Design Charter Schools (PO): It’s helped us to stay afloat, to be able to stay in business for our teachers and all the employees to have the confidence that when I go to work I can give my all and know that by the end of the period when I’m supposed to get my check, they will come on time.
DJB: They pay us the money up front and then we have the money to pay our teachers, to buy our textbooks, to keep the place clean, and to keep the whole school running.
Sandro Lanni, Founder & President, Charter School Management Corp. (SL): And there isn’t all the legal compliance once a receivable is sold, it’s sold and that’s it. So, it’s just much simpler, cleaner process and a lot of the other options.
Skip Hansen, Senior Vice President, Learn4Life (SH): Unless somebody is going to create vehicles in order for charter schools to really grow and have access to cash, then I’m going to open my arms up to any investors in any business that is going to make greater opportunities for kids to have more schools, have more books, hire teachers and all the things that we want to do.
DBS: The amount of time you have to spend convincing a skittish banker that you are worth taking the risk, is time you don’t spend focusing on your real needs. And that to me is fundamentally one of the structural values of financing by the sale of receivables. That’s a wonderful model.

A STEADY RELATIONSHIP

Sabrina Bow, Executive Director, New City Public Schools (SB): I view them as a close partner. It’s never been a doubt for me that Charter School Capital is deeply concerned, deeply interested in the well-being of schools.
RM: You’ve been working with charter school capital now for four years. They’ve been flexible, and they’ve been very professional, and they’ve allowed us to stay focused on our students.
Joanna Koenig, Engagement Director, Clifton/Larsen/Allen (JK): The knowledge that it’s a partnership long-term was very, very important. I don’t know how you can run a school when you never know if next year I’ll get that funding or not.
Xavier Reyes, Executive Director, Academia Moderna (XR): They want schools to be healthy financially and otherwise because at the end of the day, who they serve and who we serve are the same people.
PO: They’re very professional. They want to get you what you need.
BM: They spent a lot of time at our school. They got to know staff members. They got to know students and they worked with us. They seem to be proud of our accomplishments as any one of the members of our community would be.
Eric Mahmoud, Founder/CEO, BEST Academy (EM): It was more than just writing us a check. We had a very good relationship during the years that we’ve been using Charter School Capital.

BUILDING ON SOLID GROUND

JK: If we weren’t able to find an organization like charter school capital who was willing and able to provide the funding that we needed, I can’t imagine we would have survived.
PO: They have been a lifeline because they have come through for us at times when we needed it the most. And they have done things in the setting of timing that other institutions have not been able to do.
DJB: We need them. We need them desperately. And I could see where any charter school under these conditions would need Charter School Capital to keep their school alive.
EM: Now, I think it was a good business decision and as a result, we’ve been able to move our children where they need to be academically.
XR: If it wasn’t for charter school capital, we would not be here today. We would not be serving those kids that need it really bad.
SH: I think we’ve served another 2000 students in the last two years because of the availability of cashflow financing. Those are 2000 kids that could on to cure cancer or do something really great in our society.
BM: I think they’re interested in making sure that charter schools are successful and that’s an important piece to me.
EM: Based on all the options that were available to us, Charter school capital was the best option.
Sandro Lanni, Founder & President, Charter School Management Corp.: In the end, that is why we’re all here and the bottom line is if this option was not around, there’d be a lot of kids that would not be able to participate in their local charter school because their local charter school would not be open.

Charter School Capital is committed to the success of charter schools and has solely focused on charter school capital funding since the company’s inception in 2007. Our depth of experience working with charter school leaders and our knowledge of how to address charter school financial and operational needs have allowed us to make a difference to students, schools, and communities across the country. Ask us how we can help your school.

LEARN MORE

The Ultimate Guide to Charter School Facility Financing: Straightforward advice on planning, financing options, getting approved, and choosing a partner.
Does finding that perfect facility for your school seem like a huge, complex undertaking? Well, you’re not alone…it’s the greatest challenge faced by charter schools across the country. We understand that most charter school leaders aren’t financial or real estate experts, and for a good reason—you’re focused 100% on educating children. And, you want the best for them. Planning and financing any facility project is complex, time-consuming, and has the potential to distract your team from its core mission: serving your students.
This manual covers our perspectives on the charter school facilities financing landscape market and provides practical and actionable advice on planning and realistically balancing your team’s facility dreams with budget realities. We also cover the four primary funding structures that charter schools use to finance facilities: cash, banks, bonds, and long-term leases. Download this free guide to get all of your facilities questions answered!
In it, you’ll get straightforward, actionable advice on:

Facilities planning
Financing options
Getting approved
Choosing a partner

DOWNLOAD NOW