We have found that established charter schools have better access to the capital markets for long-term tax-exempt financing than ever before. In fact, my firm does nothing but charter school facility finance. The greater issue, however, is obtaining this same type of financing for new schools that don't meet the underwriting criteria required by investors or where the state statutes don't allow charter schools to either own real property, construct facilities with state funds or enter into long-term debt agreements.
We have been working with organizations that have shown a willingness to assume the facility financing risk of a start-up charter school as long as we can give them assurances of take-out financing once the school has reached certain mile stones. We have also been working with organizations that have shown an interest in guaranteeing a portion of the debt service for a start-up school, thus giving us the chance to provide long term financing. But the state law issues are much more difficult to overcome and will require efforts to induce law-makers to change the existing statutes to permit charters to access long-term capital.
We all have a long ways to go in leveling the playing field for charter school facility finance, but we have also come a long way.
Posted as a reply to:
Facilities Issues by Bob Montgomery 
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