Case Study: 5 Cs of Lending for High Achievement Charter Middle School

High Achievement Charter Middle School (“High Achievement”) is located in an urban area in the state of California. Established in 2003, High Achievement is currently in its seventh year of operation (year 2 of its second, 5-year charter).

The school currently has stable enrollment of 225 students, with long waiting lists. Since its inception, High Achievement has been located in a former District school building under a year-to-year lease, paying approximately $300,000 annually in rent. However, the school would like to acquire its own site to grow enrollment, reduce facilities expense as percentage of total revenue, and establish a more permanent home. 

High Achievement has approached you to finance the acquisition and renovation of the property. Use the 5 Cs (Credit, Competition, Collateral, Character, and Cash Flow) of lending to help analyze the school and its loan request.