Funding for charter schools doesn’t always come through when it’s needed. In California, because of the way the state legislature funded charter schools, many found themselves with bills due and no money in the bank to pay them. That’s why we created Charter Advance in partnership with Local Initiatives Support Corporation (LISC) and EdCapital Services, an affiliate of EdTec Inc. Charter Advance helps bridge the funding gap by providing affordable and expedient financing to underserved charter schools that are cash deficient from state deferrals. It also advises applicants on the most cost-effective financing structure available to meet the schools’ needs while minimizing costs. Last year, we provided a total of nearly $700,000 to three charter schools in southern California—with Capital Impact delivering about $335,000 and LISC delivering the other half. These three schools serve a combined total of about 1,400 students, most of whom are eligible for free or reduced-price lunches. One school also has a large population of students with disabilities.
The good news is, California is moving toward eliminating the deferral of payments to charter schools. As a result, fewer charter schools will need the stop-gap funding Charter Advance provides, likely making the program’s services obsolete for some schools in the near future. Charter Advance also helped create a competitive marketplace that made it more affordable for charter schools to borrow money to help bridge the cash flow gap. This is why we do the work we do: to not just help one community, but to create change that helps all communities. That’s an impact system.