is the biggest challenge facing charter schools, and 88 percent said charter schools need more funding options. Charter schools do not have access to the same funding options that are available to traditional public schools. Charter schools also don’t have collateral to qualify for a loan from most banks. In fact, fewer than 10 percent of charter schools reportedly qualify for bank loans sufficient to support their cash flow. This is where Charter School Capital helps with funding options. Their funding model relies on the creditworthiness of the state, not the school, so 95 percent of those that apply for funding are accepted.
In Minnesota, Academy for Sciences and Agriculture was faced with major funding delays. The state went from withholding 15 percent to 40 percent of charter school funding, leaving many schools crippled and forced to close their doors. The Academy for Science and Agriculture found an opportunity with Charter School Capital.
“There is a whole lot of flexibility in working with Charter School Capital,” says Becky Meyer, Executive Director for Academy for Sciences and Agriculture. “If I had to describe Charter School Capital in one In 2008, Learn4Life, a California-based network of word it would be personal. They got to know us and public charter schools, was faced with a reduction in our funding model. It is clear they are truly interested per-pupil funding and delayed payments from the state, in seeing charter schools succeed. Our school is open hindering the school’s cash flow. today because of Charter School Capital.”
“Learn4Life faced not only a reduction in funding, but also a significant delay in payment from the state,” says Skip Hansen, Learn4Life Senior Vice President. “Charter School Capital came in and was truly a gift. Without their help we would have had to turn away 2,000 students over two years. Those are 2,000 kids that could go on to cure cancer and do something great in our society.”
To provide funding, Charter School Capital purchases a school’s earned revenue (the funding the state is committed to give to the school based on student enrollment figures). Unlike other funding options, Charter School Capital’s one-time, transparent, fixed fee allows the school to know exactly what it will pay. No interest accrues over time and the school can plan its budget appropriately. Charter School Capital assumes | 23
Winter 2013 Issue of Charter Schools Today