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Providence Financial



Seven Arizona charter schools, pioneers by every possible definition, including the one where you are found laying face down on the prairie with a bunch of arrows in your back, came together in mid 1999. On March 30, 2000, they established the very first charter school bond pool in the nation. This pool was for $29 million. This act of financial salvation/funding was preceded by many hours, days, months, and years of creative activities to meet our capital needs—much like what any charter holder had to deal with back in the early years of our conception, such as: title loans on our cars, 2nd mortgages on our homes, family loans, cashing out retirement accounts, paying “prime plus 20%” to Luwegie for a 90-day hand shake loan, guaranteed by your femurs.

When you are the first, the unknowns are astronomical. Therefore, the terms were rather tying, and always in the bond holder’s favor. After all, they had the gold. We had to get Moody’s to provide a rating on a “new” classification of lendee. We agreed to have our state funding sent directly to a trustee where our bond payment was deducted prior to our state funding being sent on to our own financial institutions. We also agreed to pay an additional 5% on principal into a liquid reserve account each month. This reserve was additional protection for the bond holders in the event any one of the seven schools became insolvent and/or was unable to make their bond payments. We were all betting on each other’s success. Pretty heady stuff, but we all needed the money NOW (then), not after others had been the pioneer’s.

The restrictions we were all happy to live with then are hampering our ability today to implement our redefined goals...

Our willingness to jump in, take the risk, and meet our obligations for the last five years has made it better for every charter school in the country to have access to significant capital funding. Our contribution to the movement has been dramatic, and we appreciate your understanding and acknowledgement of that contribution. But, after five years, the world has changed; and although we have all made all of our payments every month, there are much better situations available in the financial markets today--in no small way due to our pioneer spirit. The restrictions we were all happy to live with then are hampering our ability today to implement our redefined goals as schools, businesses, and individuals. We are currently looking at our options and hope to have acceptable solutions for our individual needs in the not-too-distant future.

We’d like to thank Bill Coats with the Leona Group for his work with the State Legislature (from 14–15 against to 15-14 for) to allow charter school participation in the Industrial Development Authorities within the State of Arizona and all the other people who worked so hard to make this happen.

For information contact Brent Van Alfen, President, Providence Financial Co., Inc.
801-299-8555, brent@providencefinancialco.com