Jan 15, 2024

Key Tips for Obtaining Financing for Charter Schools

by: admin

Whether you’re opening a new charter school or expanding your institution, additional financing is often a necessity. Here at Charter Asset Management, we’ve helped provide over $300 million to more than 250 charter schools nationwide. We’ve prepared these tips for funding both new and long-established charter schools.

Tips for Obtaining Funding for New Charter Schools

When deciding how to fund your charter school, especially a school that is just starting out, these are our top tips.

  • Start the process of applying for funding as soon as you know it will be needed. The process often takes several weeks, and it’s best to have the funds ready as soon as they’re needed.
  • Recognize that obtaining financing for charter schools takes time. Have patience, be diligent, and remember your aspirations. Establishing and expanding a successful charter school is a marathon, not a sprint.
  • Accomplish other necessary tasks for your charter school alongside the financing process. For example, research programs you want to implement. Construct your business plan and financial forecast. Establish a team by hiring staff and professors. Invent your unique mission statement with the visualization of where your school will go. 

Understand the price that comes with these things, and be prepared to address it with your lender.

  • Be ready to negotiate. Negotiating with a lender is important while acquiring financing for your charter school. Know your financial position and needs, so you can recognize which package works best for you.
  • Ask for guidance and advice from those who have expertise in funding charter schools. There are a variety of organizations and resources to help you throughout this whole experience.
  • Learn the state regulations for the desired location of your charter school. Many states offer additional loans, funding, or grants to help.
  • Find a well-placed location for your institution. The area may play a part in enrollment numbers and how much financing will be needed for your charter school.
  • Have an approved charter, and create a two-year start-up plan for your school. This plan, much like the five-year plan listed below, should be an outline of goals for your school over the next two years. This includes how financial and enrollment growth should look, and the method of getting there. 

These tips will give you the footing you need to begin obtaining financing for a charter school. Overall, be sure to have a plan and a strategy to carry it out. Stay dedicated to the process even if it’s challenging, and have a good grasp on what your monetary necessities are.

Tips for Funding for Existing Charter Schools

If you have an open charter school, you likely are familiar with financing and know how to fund a charter school. However, these tips can help your funding efforts for expanding new facilities and programs.

  • Take an accurate assessment of costs to predict the exact dollar amount of financing that you will need.
  • Keep student enrollment steady or consistently increasing. This demonstrates a need for financing for your charter school. Having enrollment documentation readily available will help demonstrate that growth. 
  • Have at least three past years of clean audit reports. Those audits demonstrate your administration is responsible and trustworthy.
  • Keep monthly financial reports. These reports should include income statements, a balance sheet, and a cash flow forecast.
  • Have a five-year plan. The plan should clearly visualize your goals over that time and the avenues to bring that vision to fruition. This will assist you in predicting your monetary needs and how much financing to obtain for your charter school. 

It’s best if the plan considers your finances. This needs to line up with your growing enrollment and financial forecast.

  • Have a good credit profile. This shows dependability and that you have the ability to manage money well. If you’re wondering how to receive funds for a charter school as soon as possible, a good credit profile goes a long way. 

Following the Application Process

After the application process is complete there is a review period. Additional documents may be required. Be ready to provide them if asked. These documents help you receive financing for charter schools.

For example, you may be asked to provide a letter of good standing from an authorizer. Make all the necessary preparations to receive one. You may also need to collect leasing agreements as well as evidence of liability, if applicable to your situation. Be prepared to collect that information. 

The Benefits of Cost Research

Showing that you’ve done your research is highly advantageous. Knowing that you will be asked to present records and having them available will also be very helpful throughout the funding process. Collecting fiscal reports, enrollment documentation, and a plan for your school will enable the entire process to run more efficiently. 

Obtaining financing for charter schools can sometimes be an intimidating process. Whether you don’t quite know how to fund a charter school yet or have done it before, it may still feel unnerving. We hope these tips helped make the application process feel as accessible as it truly is. 
Contact us to talk with a charter school funding expert as the first step to finding the funding your school needs.