Charter School Feasibility Study in Massachusetts

A franchise-heavy class with very small median loans

The school class in Massachusetts, which includes charter schools, shows two contrasts. The location quotient is 1.00x, exactly the national share, and the state ranks 9 of 50 for the class, though in Massachusetts the class is 24 of 39. The median loan of $150,000 is only 0.22x the national median, set against a middle half stretching from $50,000 to $1.3 million. And 18.5% of the loans are franchised. From FY2017 to FY2026 the state approved 27 loans worth $27.5 million, so a small number of large loans carries most of the dollars.

Who the borrowers are

SBA 7(a) supplied 20 of the 27 loans and SBA 504 the other 7. Granite State Economic Development Corporation tops the 504 lenders with 5 loans totalling $10.8 million, which is the single biggest block of dollars in the cell. Eastern Bank also has 5 loans, under 7(a), totalling only $340,000, which shows how small they are. Middlesex County has 10 loans, Essex and Norfolk 5 each, Worcester 3 and Hampden 2. Approvals peaked at 8 in FY2025 and were none in FY2018, FY2021 and FY2023.

Why charter schools are hard to read here

Charter schools carry the same code as private schools and cannot be isolated. Most charters operate as nonprofits, a borrower type SBA does not lend to, so this cell cannot be read as a record of the charter sector. The franchise share of 18.5% suggests branded operators figure in it. Massachusetts schools carry no printed cancellation or charge-off figure, the loan count being too low, and an absent figure is not a nil.

Tests for a Massachusetts school

A Massachusetts school study has to test enrolment: the families in the catchment, the tuition they will pay, and competing public, charter and private options. For a charter, it has to test the approval path set by the state, the funding formula and the lease or building cost. For a for-profit school, it should test staffing, licensing and the facility lease. Debt service coverage must be shown on enrolment the school can document, with a slower fill beside it, and the appraisal of a school building will turn on its alternative uses. The loan figures show borrowers here need not expect large loans.