Charter School Feasibility Study in Arizona

A class defined by who SBA will not lend to

Arizona's charter school loans are a thin slice of a large school market. SBA approved 45 loans between FY2017 and FY2026 in the school category, worth $53.0 million, and the location quotient of 2.40x shows schools carrying far more weight in Arizona than nationwide. The state ranks 4 of 50 on volume, the median of $896,000 is 1.31x the national class median, and the class sits 18 of 39 among Arizona's classes. The code cannot separate charter schools from private schools, and since most charter operators are nonprofit bodies outside SBA's lending, these loans reflect the small for-profit corner of the charter world.

Programmes, banks and counties

Most loans, the central half, run $250,000 to $1.8 million. SBA 7(a) made 33 of the loans and SBA 504 made 12, a high real estate share for a service class, consistent with schools buying or building facilities. Franchise brands appear in 11.1% of loans, which probably reflects private school franchises more than charters. Arizona Capital Source is the one lender named in the table, with 6 of the 504 loans worth $7.2 million. Maricopa County has 38 of the 45 loans and Pima has 5, so the Phoenix area dominates. Coconino and Yavapai have 1 each. Approvals peaked at 12 loans and $17.5 million in FY2025 after only 1 in each of FY2021 and FY2022.

Rates we cannot print

Arizona schools get no cancellation figure and no loss figure on this page. Both rest on cohorts with fewer than 30 loans, and a percentage drawn from so few schools would mislead. We give no figure and do not describe either as zero. A lender should treat the absence as lack of evidence, not good news, and should ask the borrower for the chartering history and renewal record instead.

What the Arizona study has to establish

Any study of an Arizona school project should begin with enrolment: the families within a realistic travel distance, the schools already serving them, and the grades the project intends to add. It must test the revenue model against per-student funding and tuition, since income follows enrolment closely, and compare facility cost with a ticket that runs near $896,000. Debt service coverage should be shown with enrolment below target for several years. Where the borrower leases to a charter operator, the study should examine the operator's charter term and renewal prospects, because the lease is only as strong as the charter behind it. An appraisal of a school building is limited by its special-purpose design.