Receivable Sales are Beneficial to Charter Schools

Why are Receivable Sales Beneficial to Charter Schools?

Charter schools often have difficulty accessing capital from traditional sources for operations and growth. One method of financing widely used by many industries is receivable sales. This reliable and flexible transactional process, pioneered by Charter School Capital for charter schools, provides access to capital needed to support operations, facilities, programmatic expenses, or other obligations.

What is a receivable sales transaction?

In a receivable sales transaction, Charter School Capital purchases state aid payments due to the charter school from the state and, in exchange, provides funding to the school in advance of the state payment distribution date. The state payment remains with the state until the scheduled distribution date arrives. Charter School Capital assumes the timing risk if the state delays the distribution of the payments due to the school. There are no additional costs to the charter school in the event the state delays payments.

How are the amounts available to the charter school calculated?

Amounts available for a charter school to sell to Charter School Capital are typically established by attendance-based entitlements or eligible grants owed to the charter school. Selling attendance-based entitlements and grants gives the charter school community access to much-needed capital when they need it, so schools are able to focus on educating students.

How does the receivable sales program work?

Charter School Capital and the charter school enter into a receivables purchase agreement and execute a bill of sale. Executing these agreements transfers ownership of the state payment to Charter School Capital and the school receives the agreed-upon funding. When the state distributes the payment to Charter School Capital, the funds are then distributed as outlined in the bill of sale.

Receivable Sales for charter school funding

What are the costs associated with the sale of receivables?

There are only two costs involved in our sale of receivables, the program fee and the discount.

  • The program fee is a fixed fee for the transaction.
  • The discount is the cost of selling a receivable and is determined by market-related factors including but not limited to the type of receivable being sold, the time the receivable is outstanding, and the credit-risk profile of the school. The discount is determined at the time of sale and does not change after the sale has occurred

Why choose receivable sales as a financing option?

  • Selling attendance-based and other receivables helps accelerate a charter school’s ability to grow.
  • Our qualification process is simple and more than 95 percent of schools that apply qualify.
  • Schools have the ability to adjust funding levels to align with cash flow needs for existing operations or growth
  • The sale of receivables is a reliable and flexible option for raising much-needed capital for charter schools.

Tweet this: Receivable sales are beneficial to charter schools- More than 95% that apply qualify, adjustable funding levels align with cash flow needs, it’s a reliable and flexible way to raise capital for your school. Read more: https://ow.ly/eSbV30iihlg

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Charter School Capital logoCharter School Capital is committed to the success of charter schools and has solely focused on funding charter schools since the company’s inception in 2007. Our depth of experience working with charter school leaders and our knowledge of how to address charter school financial and operational needs have allowed us to provide over $1.6 billion in support of 600 charter schools that educate 800,000 students across the country. For more information on how receivable sales will benefit your charter school, contact us!

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charter school fundingCharter School Capital Funding Allows School Leaders to Stay Focused on Their Students

With so many choices for where go to access financial resources for your school, it’s important to select the right one for you. We believe in the power of charter schools and their leaders to deliver quality education to families across the country. And we’re proud to provide the reliability and stability charter leaders require as they walk their journey to better educate more students today—and in the future.

Please listen as Ricardo Mireles, Executive Director, Academia Avance shares his experience working with Charter School Capital.
This video was originally published Jul 17, 2014. We are proud of our continued partnership with Academia Avance. We are honored to support them in continuing their mission of setting a standard for public charter school excellence and inspiring a lifetime of learning and leading.



Charter School Capital Funding Helps Academia Avance Sustain Thier Growth

Academia Avance is a charter public school in the northeast community of Highland Park in Los Angeles. We serve grades six through 12. We are on track to having 500 students for this upcoming fall charter funding.

[The way that we can access] charter funding makes it very difficult for schools that increase their enrollment [because] you don’t see those funds until the spring. But the relationship that we had built with Charter School Capital allowed us to say, look, this month I need this much money.
Another challenge that charter schools have, is the need (in any kind of financial transaction) to provide some kind of collateral. And so, for new schools, small schools, they don’t own a building. They don’t have assets that they can pledge just for collateral. It’s just very difficult.

I’m really appreciative of how Charter School Capital was able to understand what our need was. We looked at this as a very different way of getting funding based on the one collateral that we do have – and that’s our students.

Charter School Capital has allowed us to work with a product that is flexible in terms of the amount, in terms of the timing. In all the conversations I’ve had with the leaders of Charter School Capital and their entire staff, they always understand what we’re trying to do with our students and how they’re joining us in making it work for our students.
We’ve been working with Charter School Capital now for four years and throughout, they’ve been flexible, and they’ve been very professional, and they’ve allowed us to stay focused on our students.

Starting the relationship with Charter School Capital is different from what we have experienced with other financial institutions in that they are very focused on the viability of the school going forward relative to the charter.

Without Charter School Capital, Academia Avance wouldn’t exist.


Learn more about Charter School Capital Funding

Our team works with you to determine funding and facilities options based on your school’s needs. If you are trying to meet operational expenses, expand, acquire or renovate your school building, add an athletic department, enhance school safety/security, or buy new technology, complete the online application below and we’ll contact you to set up a meeting.


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