1. Can Our School Afford a Permanent Facility?
Louise Manuel, ExED
Greg Brendel, Bouma
Jennifer Afdahl Rice, NCB Capital Impact

2. Agenda
Introductions
Budgeting
Developing
Financing
Case studies
Q & A

3. NCB Capital Impact: Charter School Expertise & Social Impact
NCB Capital Impact has been financing charter schools for 17 years.
To date, our financing has totaled over $500 million and provided nearly 200,000 charter school seats across the country.
NCB Capital Impact is the largest, Community Development Financial Institution (CDFI) charter school lender.

4. The Five C’s of Lending Character Competition Credit Cash Flow
Collateral

5. “CHARACTER” Trust and Experience School Management and Operation:
-Board
-Executive Director
-Principal
-Finance Manager
-Teacher retention
Project Management:
-General Contractor (GC)
-Architect
-Project Manager
Student Population and Education Model:
-%FRL, ESL, minority
-Curriculum
-# teachers per students
-Parents participation

6. “COMPETITION” Charter and Academic Performance Enrollment:
Political support:
-Authorizer
-Local/state
Students Achievement:
-API
-AYP
-Graduation Rates
Enrollment:
-Growth trends
-Waiting List
-Retention Rates
-Attendance
-Other options in the neighborhood

7. “CREDIT” Financial Condition and Performance
Balance Sheet: cash & debt
Income Statement: operating margin and bottom line
Credit History
Track record with creditors

8. “CASH FLOW” School’s capacity to repay its debt
Debt Service Coverage Ratio
-On historical performance
-On cash flow projections
DSCR = EBIDA / Debt Service
= (Net Income + Interest + Depreciation + Amortization) / (CPLTD pp + Interest)

9. -Debt Service Reserve Account
“COLLATERAL”
Recourse in case the school cash flow is not sufficient to cover the debt payments
Reserve Accounts:
-Debt Service Reserve Account
-Maintenance Reserve
Credit Enhancement:
-CCBF Program
-Letter of Credit
-Guarantees
Real estate:
-Down Payment
-Appraisal
-Loan-To-Value (LTV)
-Leasehold

10. What do lenders evaluate?
School Project
Financial condition and performance
Management and Governance
Planning and Reporting
School performance
Scope of project, plan & budget
Project team
Timeline
Operational plan (post completion)
Repayment plan

11. Beginning the Conversation: What Will the Lender Request?
Organizational Financial Facility
Strategy and business plan
Annual report and brochure
List and bios of board of directors, key staff
List of major funders
School performance
Audited financial statements
Current year budget
Year-to-date financials
Existing debt and borrowing history
Multi year operating projections
Fundraising plan & commitments
Project description, scope of work
Project team bios
Project budget
Project timeline
Copies of leases, contract of sale, construction and architect’s agreements
Appraisal

12. KIPP Raices

13. The Sustainable Answer Key
Resources
The Answer Key
The Sustainable Answer Key

15. Contact Information:
Greg Brendel Louise Manuel
National Development Executive Facilities Development Director
Bouma  Excellent Education Development (ExED)
300 N. Lake Ave., Suite LaGrange Avenue, 2nd Floor
Pasadena, CA Los Angeles, CA  90025
(310)   X245
Jennifer Afdahl Rice
Senior Loan Officer
NCB Capital Impact
1333 Broadway, Suite 602
Oakland, CA
Tel
Fax
Contact Information 15