Over 20 years experience supporting schools and charities
Get support negotiating your new term loan or asset finance with your existing bank and potential lenders, helping you achieve best value and saving you time.
We do not usually charge you a fee* to work with you to find the funding you need.
Up to 25 years committed term*
Secured and Unsecured options
from £500,000 to £25m+
Up to 100% funding
Secured and Unsecured options
What every independent school needs to know about term loans
Having worked with independent schools over the last 20 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 concern 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.
We will work with you to consider a wide range of funding options to give you an informed choice of where to secure your funding from.
We do not usually 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 you pay nothing further to us.
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. Further detail is included in our general terms of engagement.