Education Sector Finance

Educational institutions across the country are rethinking the way they finance themselves, seeking smarter funding solutions that more closely match the needs of the sector today.

Running an educational institution is complex and comes with a range of challenges. There are two critical challenges that institutions face; firstly, the need for a flexible supply of finance to support growth and investment plans. Secondly, a healthy supply of working capital to ensure all costs, including key suppliers are paid on time to ensure the smooth running of the institution.

Efforts to maintain a healthy supply of working capital can be hindered by the staggered payments from your Student Loan Company. Coupled with the lack of traditional finance resources, it could cause growth plans to stall and increase the pressure on suppliers as invoice payments are delayed.

A new way of financing the education sector

Education finance is a specialist structured finance product specifically designed for the educational sector. It offers a long term funding solution but with short term flexibility.

Our specialist education finance solution:

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. Alternatively, we can pay the educational institution direct.

Negotiate better terms – Provides your institution 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 – Plus, it is off balance sheet so does not interfere with your existing funding arrangements.

How it works?

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 the upfront funding

Student Loan Company continues sending you the 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 the 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 of Education Sector Finance

Improved cash flow - An immediate cash injection that you can use to run the institution 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 Board minutes agreeing the facility is all the funder needs

Stabilisation of your supply chain - By assisting suppliers with their working capital management

Don’t just take our word for it

University – Southern England

Challenge:

The University was doing very well and has seen a significant period of growth. However, this success was threatened when their previous funding provider didn’t appreciate their requirements. Realising the need to fund their institution in a different way, the university decided to seek a finance partner who gave them the flexibility of funding to help them achieve their ambitions.

Result

An education sector finance package that complemented their existing finance provider, putting them back in control of their finances and bolstering their cash flow gaps when they needed it. This funding allowed them to invest in the facility, keeping them one step ahead of their competition and recruit high calibre lecturers to meet increasing demand.

“The flexibility is perfect for us. There is no ongoing contract or additional security required so this complements our existing finance facilities.”

Income Manager

College – Merseyside

Challenge:

The college had historically used short term loans from their Bank to support building renovations and used student income from the Government to manage expenses, with surpluses invested back into facilities and infrastructure. However, with Government funding cuts and a change to the way the Government pays student income, the college had to change the way it managed cash flow. The College needed a source of finance that would support their new cash management strategy without interfering with existing funding lines.

Result:

Having been introduced by My Invoice Finance, they were provided an £800K Education Finance facility. Its flexibility allowed them to draw on it when they need to and pay it off when they want to. It worked alongside Government funding, giving them the comfort that they have the funding they need, when they need it.

“We appreciated My Invoice Finances’ understanding of our sector and how we needed a funding facility that worked for us. It was set up quickly and easily and enables us to deliver our planned changes and continue to invest in the College. With the facilities’ flexibility, it gives us the certainty we need to continue driving our plans.”

Head of Finance