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Charter Schools Information
REFINANCE YOUR CHARTER SCHOOL FACILITY LOAN
In the past, alternatives for charter school facilities financing have been very scarce. Generally, lenders and investors have been in a position to dictate terms which include prepayment penalties and prohibitions on adding new debt. For some years, that is all that has been available so if you borrowed money for a facility, you likely have some issues with your present financing that you wish were different. If you have outgrown your present financing, for example, and need to add to it, you may have a problem. If you want to refinance at a lower rate which you may now deserve and is now available, you may have a problem.
Refinancing your present facility loan is not impossible. It can be expensive but may, under certain circumstances be worth it. For example, a school I am working with needs to add a gymnasium in order to attract more students and offer a wider variety of activities. Their present loan does not allow for adding new debt. The advantages in this case outweigh the costs of refinancing. A new loan will be at a lower rate also because the school is more established than it was before and has an excellent track record. I am arranging financing for another high school that is refinancing three loans and building a new gym and theater complex. I have found financing that will accomplish this while keeping their payments the same or slightly lower than they are presently paying. In this case the costs justified the benefit. If your present financing arrangement is not satisfactory, it costs you nothing to have me look into some possible alternatives for you.
Fortunately, the charter school facility financing market is getting broader and deeper every month. I am very pleased with the new lenders and underwriters that I have introduced to the market and with whom I am now financing schools. Currently, I have a working relationship with seventeen sources of money including direct lenders and underwriters. There are at least five different fundamental approaches to financing a charter school facility with many variations on each approach. A charter school has a better chance of finding a good "fit" for their facility financing needs than they ever had in the past and the market will continue to improve.
Another concern I have about charter schools getting into facility financings that they may regret in the future is that charter management teams rarely include someone who is experienced or qualified enough to know where to go for money, let alone to know what programs are available. They either try to learn as they go or turn to an authority figure who is perceived to be an expert. Attorneys, accountants, mortgage brokers, and friends who are business people all fit into this category. A little knowledge can be a dangerous thing and getting help from someone like the above, although well meaning, can often be worse than learning as you go and doing it yourself.
Providence Financial Company, Inc. has over $100M in charter school facility financing applications in our system. We only work for the school to provide the expertise to arrange the complex financings that charter schools need for their facilities. We can save you thousands! Give us a call to see if we can help you.
Providence Financial Company, Inc.
Toll free 877-610-6766
Brent Van Alfen
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