Charter School Feasibility Study in North Carolina

An unusual lending record for a nonprofit field

Charter schools sit awkwardly with SBA credit, because most such schools are nonprofits, a borrower type outside SBA lending. The North Carolina record therefore describes a narrow set of cases: 28 approvals between FY2017 and FY2026, worth $35.9 million, filed under the school class that also holds private schools. Those include for-profit operators and private schools, so the number cannot be read as a count of charter openings.

What stands out in North Carolina

The state ranks 8 of 50 for the school class, while the class itself ranks 22 of 39 among North Carolina asset classes. With a location quotient of 1.42x, schools weigh more heavily in North Carolina lending than in the country at large. Loans are also larger: the median of $871,800 is 1.28x the nationwide figure for charter and other schools, and the middle half of loans run from $266,250 to $1.9 million. Of the 28 loans, 23 went through 7(a) and 5 through 504. Franchised operators account for 25.0% of loans, so most of the record belongs to independent operators.

Counties and timing

Durham and Wake counties each recorded 7 loans, followed by Alamance and Mecklenburg with 3 each and Guilford with 2. Buncombe, Catawba, New Hanover, Onslow and Pitt counties each have 1. The strongest year by dollars was FY2018, at $11.0 million from 5 loans, and FY2026, a complete fiscal year, closed with 5 loans and $3.0 million. No lender appears in the table for this cell, so this page says nothing about who holds school loans in the state.

Floors and what they omit

Loan Analytics shows no cancellation or charge-off percentage for North Carolina schools, since fewer than 30 loans sit in the cohorts behind those rates and a rate on so few loans would mislead. The under-30 rule is a Loan Analytics presentation rule, and a missing rate is not evidence of a spotless record. The shared school code is the main limitation here: any figure above may describe a private school, a tutoring school or an academy as readily as a charter.

What a charter school study has to test

A charter project does not look like most SBA borrowers, so the study should first establish who the borrower is and whether its structure fits a lender at all. Enrolment is the central test: the number of students the authorising body will allow, the per-pupil funding that follows them and the timing of those payments. Facility cost, whether bought, built or leased, must be set against that funding stream. Coverage of debt payments should be tested against a first-year enrolment shortfall, and the appraisal needs a clear view of what the building is worth to a buyer other than a school.