Explore more than just your existing bank for your term loans, asset finance and leasing options
There are very few specialist Independent School Brokers which has meant most Independent Schools either explore funding options themselves or simply go to their existing provider
We have taken our 20 plus years experience of working with Charities and the Independent School sector to create the 'Education Banking Consultancy' This gives you the opportunity to use our experience to explore more funding options for your school.
Whether your Independent School is looking for a Term Loan, Asset Finance, Vehicle Finance or an Operating Lease, we will negotiate with your existing bank as well as other banks and finance companies to help secure the funding you need.
We do not charge you a fee* to work with you to find the funding you need
Contact us to discuss your funding needs and projects with lending terms from 12 months to 25 years.
What every independent school needs to know about term loans
Having worked with independent schools over the last 10 years and supported hundreds of millions of term funding, there are a number of areas of consideration not all schools are aware of.
As a School, you may wish to fund larger projects over periods of time that many banks aren’t comfortable with.
As such, that £10m funding you need to profile over a 20 or 25 year term can quite easily put your school at risk if all avenues are not considered fully.
If you do wish to fund over a longer term (20 years for example), Banks will usually offer you a 5-year term over a 20 year payment profile.
This means (on a capital and interest repayment method) your payment is designed to fully clear your debt over the 20 years but the bank will renegotiate the loan after 5 years.
The challenge with this is that the bank has only committed to lend you the money for the first 5 years, as such, you can also only look to manage interest rate risk for the term of the facility (in this case, 5 years).
The consequences? During the 5th year, you will need to spend time and resources renegotiating the loan with your existing (or a different) bank. There will be a further arrangement fee to pay, a new loan margin to negotiate and the underlying interest rate environment will likely have changed potentially increasing your total loan costs.
Whilst this may not be a challenge for all schools, it is worth remembering that a Bank's appetite to lend to certain sectors can vary, and as such, your existing bank may want an increased margin to renegotiate your loan. In more extreme cases, your bank may not wish to continue the loan at all requiring you to seek the funding from alternative sources.
This has the potential to leave you in a position where you need to renegotiate the debt but no bank is prepared to do so, leaving your school insolvent if it doesn’t have the funds to repay.
If certainty of the longer term committed funding and/or the ability to manage your interest rate exposure over the longer term is important, then you should ensure this is part of the tendering process.
We do not charge you a fee* to work with you to find the funding you need.
*If we approach the lenders on your behalf (including your existing bank), the lender will usually pay us an introduction fee ensuring our service to you is made at no cost to your school.
If you would like to engage our support or consultancy for a project already funded then we will be happy to support for a pre-agreed fee.
Progressive Edge Solutions Limited, trading as Education Banking Consultancy, is an Introducer Appointed Representative of Medifinance Limited who is authorised and regulated by the Financial Conduct Authority