CCSA Works with Lending Community to Provide Emergency Loan Program
May 11, 2011
While districts can reliably access Tax and Revenue Anticipation Notes (TRANs) to address most of their cash flow concerns, charter schools have far fewer options.
CCSA, together with financial partners Nonprofit Finance Fund (NFF), Enterprise Community Partners and Low Income Investment Fund (LIIF), launched an Emergency Loan Program in response to Spring 2011 state delays. NFF also acted as lead underwriter and servicer to the program.
The Emergency Loan Program provided approximately $2.2 million in loans. CCSA is thankful that its partners agreed to keep costs down and competitive, with a 7% interest rate (per annum) and 2.5% upfront fee. Funds were set to be disbursed mid-April, with repayment due when the state repays the delayed funds.
"We are happy to work with our lending partners to offer another potential option for members during this financial storm," said Joe Harrington, CCSA's Director of Financial Services. "While there is no magic solution that can work for all charter schools, I'm encouraged that there are now more options for charters to consider than at this time last year."
"Nonprofit Finance Fund has been a CCSA loan program partner since 2005 and remains committed to working with CCSA to provide working capital and other financial solutions to charter schools," said Jennifer Kawar, Director, Capital and Strategic Partnership Development for NFF.
In this extremely difficult cash flow situation, CCSA has posted new resources to help charter schools decide a course of action. While charters have limited access to loans compared to school districts, there are options to consider. Members, please visit the real-time Budget Update section of our website for advice and resources, including:
- 2011 edition of CCSA's Charter School Financial Management Guide
- Bridging the Gap: Understanding Cash Flow Options in the Midst of Deferrals
- Revenue Sources for New Schools
- Cash Flow Management for News Schools
These resources will be updated, and new materials will be created, as additional information becomes available.
CCSA will also be offering in-person meetings and webinars such as regional meetings and business manager meetings in May that will allow for one-on-one interaction with experts and other colleagues. Review the schedule on CCSA's events webpage. And of course, our Help Desk and Regional Directors are available for technical questions, strategy and support.
"We are well aware of the level of concern that exists within the charter school community regarding the budget situation and how painful and disruptive this situation is for charter schools," said CCSA President and CEO Jed Wallace. "As ever, the Association is challenging itself to be responsive to the needs of our members during this time of extraordinary challenge. If you have suggestions or thoughts about additional steps we could be taking to support our members, please feel free to reach out to me directly, or to anyone within the Association."