In many cases, per-pupil allocations might not be distributed to a charter school until several months after the school has begun to incur expenses. The costs of the start-up phase, as well as any facility renovation or acquisition expenses, will likely require supplemental funding. Fundraising may be one resource. Finding a bank that will loan your school the money could be another option.
Charter schools are new, unproven organizations, with limited resources.
And because Illinois grants charters for five-year periods while typical loan repayment periods extend to twenty years, banks cannot be assured that your charter school will still exist to repay the loan after five years. While a loan can give your school the up-front funding needed to carry out a large project, the interest that accrues on that loan will ultimately make the project more expensive. Determine when these payments are due and include them in your cash flow projections. If you do not have the cash to repay your loan as it is due, you will be forced to default. Bankers themselves will not tell you how much to borrow or on what terms, so you should seek outside financial advice before submitting your loan application.