Charter schools seeking financing now have a new place to turn--PNC Bank is creating a new fund to loan money to schools looking to expand enrollment.
The revolving-loan fund will target schools with financing needs of more than $7 million, and the schools must have a proven track record of academic and financial success, the company said in a press release. The money would be used to add capacity to an existing facility, or for buying a new one.
Enrollment in charter schools, publicly financed alternatives to traditional public schools, has been growing in recent years. More than 2 million students attended charter schools in the 2011-12 school year, up from about 1 million in the 2005-06 year, according to the National Alliance for Public Charter Schools.
"Facility ownership and ability to expand is crucial to charter schools seeking to grow their enrollment," Greg McKenna, managing director at PNC Capital Markets, said in the press release. The new fund "is a convenient option for schools seeking growth in the near-term but lack the necessary funds to move forward."
The fund will advance up to 80% of the value of a school's property. Repayment of the loan occurs when the school's permanent financing is in place. Charter schools also can tap the tax-exempt municipal-bond market for financing.
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