LISC Working Capital Program

Mission

The goal of the LISC Working Capital Program is to provide affordable and expedient financing to underserved charter schools in Los Angeles County that are cash deficient from the state deferrals. Beyond merely providing funds, the program seeks to advise applicants on the most cost-effective financing structure available to meet the schools’ needs while minimizing costs.

Overview

The LISC Fund will purchase state certified, attendance-based receivables from eligible, approved charters, to help schools manage the cash shortfall caused by the state deferrals. For example, to cover the spring 2012 deferrals, the LISC Fund will purchase schools’ P-1 ADA certified data. The program is designed to help applicants develop a strategy to minimize their total cost while still meeting their cash needs.

Program Contributors

LISC has engaged with EdCapital Services to deliver a competitively priced working capital program for eligible charter schools.

EdCapital Services LLC is an affiliate of EdTec Inc., the leading charter school finance and operations experts in California since 2001. Leveraging its expertise in charter school finance, EdCapital will help administer the program and underwrite applications. EdCapital will also provide applicants with unbiased advice on designing the most cost-effective approach to selling their receivables. EdCapital will walk applicants through the application process and help them think strategically in identifying which receivables to sell and when.

Key Differentiators

The following factors distinguish the LISC Fund from other financing programs, as it is..

• Affordable. The LISC Working Capital Program could be the least costly option for your charter school. Compared to other available receivables purchasing programs, the LISC Fund offers extremely competitive rates. No costly legal opinions or debt coverage requirements are involved.
• Fast. Once a complete application is submitted, funding can arrive within 3.5 weeks, which is a significantly shorter turnaround time than the time it takes to get approved for a loan. The process is efficient and requires minimal steps. It does not require any pre-qualification application or a legal opinion before you can submit an application.
• Transparent. The application is straightforward and easy to fill out. Fees and pricing are transparent. Program resources are available to answer questions and explain all costs to the school before it commits.
• Flexible. The application and underwriting process is easier and more flexible than applying for a traditional loan or line of credit. Schools will not be forced to commit more than they need to sell upfront.
• Precise. Participating schools will be told exactly how much of their receivables they need to sell to meet their specific cash need, ensuring that the school avoids excess fees. 
• Mission Driven. LISC is offering the only receivables working capital program funded by a national Not-For-Profit Community Development Financial Institution. LISC is motivated to offer competitively priced financing for underserved charter schools as this is in line with its mission.

Eligibility Criteria

The program is initially available only to charter schools in Los Angeles County that meet the eligibility criteria described below. Schools that are selected for funding must also satisfy the program’s underwriting requirements.

Schools serving grades in the K-8 range:

No. of Years of Operation	FRL%	Most Recent Year API		Cumulative API Growth
0-3	≥ 30% of total student population	≥ 650	or	25 points (over operating period)
3+	≥ 30% of total student population	≥ 700	or	50+ points (over prior 3 years)

Schools serving grades in the 9-12 range:

No. of Years of Operation	FRL%	Most Recent Year API		Cumulative API Growth
0-3	≥ 30% of total student population	≥ 600	or	25 points (over operating period)
3+	≥ 30% of total student population	≥ 650	or	50+ points (over prior 3 years)

Priority is given to schools:

• Located in low to moderate income census tracks. Please visit FFIEC to determine if your school qualifies.
• That are considered LISC “Building Sustainable Communities (BCS)” Schools. The target areas include the following communities: Vernon-Central, Crenshaw Corridor, and Boyle Heights. Please visit LA LISC to determine if your school qualifies.

Fee Structure

The fee structure is simple and transparent:

• $300 application fee (This fee is credited towards the origination fee if the application is approved. Only if the school withdraws its application after submission will the fee be nonrefundable.)
• 1.75% origination fee
• 7% annualized discount rate for the term of the financing
• $750 legal/document preparation fee per transaction due at closing
• Download pricing models (PDF, 92KB)

Timing and Availability

Resources are limited so apply now!

The LISC Fund will begin accepting applications immediately. Once a complete application is submitted, funding can arrive within 3.5 weeks. Eligible, approved applicants will be funded on a first-come, first-served basis.

The LISC Fund does not have unlimited resources, so apply now. There is no minimum funding amount to participate in the LISC Fund. The funding limit is up to $2M. 

Application

If your school is eligible and would like to apply, please download the application form. Email complete applications to stephanie@edcapitalservices.com. One application per charter must be submitted if you are a CMO or multi-site school, assuming each charter wants to sell receivables. 

Download the Application (32KB)

To submit your application fee, please write a $300 check to “LISC” and mail to:

EdCapital Services
1410-A 62^nd Street
Emeryville, CA 94608

Underwriting will not begin until a complete application and the full application fee is received.

Contact Us

For questions on the application, contact EdCapital Services. For questions on the program, contact EdCapital or LISC.

EdCapital Services:	LISC:
Stephanie Cho, Development Manager Email: stephanie@edcapitalservices.com Phone: 510-350-3010 x 329 Fax: 510-350-3016	Claudia Lima, Executive Director Email: clima@lisc.org Phone: 213-240-3118 Fax: 213-250-9889