Home

Monthly Newsletter

Charter Schools Info

Charter Schools Funding

Affiliate Websites

Referral Services

Site Map

Contact Us

Providence Financial









MONTHLY NEWSLETTER:  MARCH 2006 ISSUE

2006 NATIONAL CHARTER CONFERENCE
BY BRENT VAN ALFEN, PROVIDENCE FINANCIAL COMPANY, INC.


We are intentionally sending the newsletter a little late this month, because we wanted to report on the conference we attended and participated in. I had the opportunity to speak to an overflow crowd in the Hands on Pavilion Wednesday afternoon and had a wonderful time meeting people from all over the Country who share our enthusiasm for charter schools. In attempting to share some things with you that I discovered at the conference, I feel somewhat like the proverbial mosquito in a nudist camp. It is hard to decide where to start.

I met a man from a Real Estate Investment Trust who is investigating various strategies for financing facilities of new start-up charter schools. He is currently in the due diligence process of determining if his company wants to move into this arena and, if so, on what terms. Preliminarily, their program sounds expensive; but considering the risks associated with this type of financing, it is probably worth it to many start-up schools. I asked him to let me know if he decides to proceed with this program, so I can announce it in a future newsletter. Stay tuned.

I met a representative of a non-profit lender who can provide small loans under $2M to charter schools. In fact, they will make a loan as small as $25,000. They will loan for credit lines, unsecured loans, second mortgage loans and equipment loans for charter schools. This has been a heretofore unfilled need for charters. They are national in scope, and I will be glad to assist your school in getting this type of loan from them. Just give me a call.

I met an architect/developer who said he can help charter schools construct a building for very low per-square-foot prices by using one of his standard plans. It sounded very impressive.

There was a company promoting the New Market Tax Credit program with some impressive claims. While some financial people may disagree with their methodology for arriving at their interest rate claims, it still appears to be a good deal for certain charter schools. The fact remains, however, that there are currently no credits available except in very narrowly defined geographic locations or for narrowly defined uses. The only tax credits that are available at this time, at least that I am aware of, are offered through companies that do not provide an overall financing program that is as good as a bond issue. Tax credit programs may be structured in various ways and the ones that are left benefit the lenders and investors more than the borrower. Another allocation of New Market Tax Credits could be available as soon as next May. If they become available, Iíll let you know. I can assist you in making application with a company that has the best program available. In fact, it may be a good idea to get your application in now, because there will be many more applications than there will be credits available.

I had a long discussion with a man from a company that assists new charter schools in setting up their business office, curriculum, and facilities. He specializes in getting new charters started and managing the ďback officeĒ for new and established schools. This service should be in great demand among many charters. If you are interested in talking with him, give me a call and Iíll introduce you to him.

Maybe the most important observation of the conference from my perspective is the sheer proliferation of financing alternatives and sources becoming available to charters.

A man was at the conference who represents the Defense Department. He is looking into the practicality of working with charter schools as a method of helping communities accommodate influxes of families transferred there by the Armed Forces. There are apparently situations where the impact of many families moving into communities in a short period of time overwhelms the public schools.

A man was at the conference who was representing Standard and Poorís, a major national rating agency. He also spoke at one of the breakout sessions. This indicates the increased recognition by the rating agencies that the charter school business is here to stay and is a solid, legitimate industry. To me, his attendance was a very good sign for charter school financing.

Maybe the most important observation of the conference from my perspective is the sheer proliferation of financing alternatives and sources becoming available to charters. As I have stated in previous articles, this is to be expected in the life cycle of new industries. As the charter school movement continues to mature, financing sources and opportunities will continue to multiply. This situation brings with it opportunities to get lower-cost financing for your school. In many ways, this amplifies the need to use care in researching alternatives available to your school when you begin to look for financing. I am in a good position to assist you and would welcome that opportunity.

Phone: 801-299-8555
Email: brent@providencefinancialco.com