The smart funding choice for the education sector
Education Finance Sector
Educational institutions across the country are rethinking the way that they finance their businesses as they seek smarter funding solutions that more closely match the needs of the sector today.
Running an educational institution is complex with a range of challenges. Two critical ones are firstly, the need for a flexible supply of finance to support your growth and investment plans and secondly, a healthy supply of working capital to ensure all costs and most importantly your key suppliers can be paid on time and ensure the smooth running of your business is guaranteed.
The staggered three instalment schedule of payments from the Student Loan Company as detailed in your Student Loans Company handbook can disrupt efforts to maintain a healthy supply of working capital.
Coupled with the inability of traditional finance sources to help, it could cause your growth plans to stall and increase the pressure on your suppliers as you delay invoice payments.
Education Finance is a specialist structured finance product designed specifically for the educational sector which delivers an upfront injection of funding against scheduled Student Loan payments before they are due. It also provides the option for your suppliers to benefit from faster payment of invoices at competitive finance rates.
• DELIVERS AN UPFRONT INJECTION OF FUNDING – Against scheduled Student Loan payments before they are due.
• REMOVES THE NEED TO USE CURRENT WORKING CAPITAL TO PAY SUPPLIERS – Suppliers can receive fast payment against approved invoices at more than competitive rates or alternatively we can pay the educational institution direct.
• NEGOTIATE BETTER TERMS – Provides your business with the ability to negotiate better terms with suppliers based on the guarantee of faster payment of invoices.
• FLEXIBLE – Flexible facility for you to use as and when required with no contractual obligation.
• NO SECURITY REQUIRED – No security is required and it is off balance sheet so does not interfere with your existing funding facilities.
How it works at a glance?
YOU SEND CONFIRMATION OF YOUR STUDENT LOAN PAYMENT SCHEDULE
YOU DECIDE ON YOUR FUNDING REQUIREMENT AND ISSUE THE FUNDER WITH A PROMISSORY NOTE
THE FUNDER PROVIDES YOU WITH UP FRONT FUNDING
STUDENT LOAN COMPANY CONTINUES SENDING YOU SCHEDULED PAYMENTS
YOU REPAY THE FUNDER
What does it cost?
The cost of upfront funding against the scheduled Student Loan payment is agreed in advance.
Typically, this is a pre agreed rate discussed and agreed with you at the outset of the agreement, plus a one off arrangement fee which can be deducted from your first advance.
There are three flexible charging options for you to choose from:
• YOU PAY – You can pay the cost.
• WE PAY SUPPLIERS DIRECT, THEY PAY COSTS – The Funder can pay your suppliers direct and they pay the cost as an early settlement discount.
• WE PAY SUPPLIERS DIRECT, YOU PAY COSTS – The Funder can pay your supplier direct and you can pay the cost.
Benefits to You
• IMPROVED CASH FLOW – By accelerating payment from the Student Loans Company providing an immediate cash injection that you can use to run the business or realise your investment plans
• HIGHER LEVEL OF FUNDING – 100% of invoice is funded (less any fees that you agree) which compares favourably to other forms of finance
• INCREASED TRANSPARENCY AND COMPETITIVE PRICING – Fees are agreed upfront with you and are often lower than traditional forms of finance
• FLEXIBLE – Both you and your suppliers can opt in and opt out on a per invoice basis which means there are no lock-ins and no limits to the number of invoices submitted. There are no exit fees or early termination fees
• NO SECURITY REQUIRED – The promissory note, a deed of undertaking and a board minute agreeing the facility is all the Funder needs
• STABILISATION OF YOUR SUPPLY CHAIN – By assisting suppliers with their working capital management