VIEW FROM THE CLASSROOM


FEATURE FOCUS: FINANCE


Banks are also falling short in other ways when it comes to supporting the sector. Our research shows that when it comes to savings, businesses in the education sector are missing out on more than £110 million every year by keeping their instant access cash in a low-interest high-street account instead of the best instant access rate on the market. As the pressure keeps growing, this income could have a real impact on schools and their pupils. So, with all this said, financial advice and support for the education sector has never been more crucial. Without it, schools could face larger class sizes, limited teachers – especially those specialised in subjects – and the threat of closure in extreme cases. This leads to significantly reduced opportunities for pupils and staff pushed to their limits.


Challenging old lessons


High-street banks may have left the education sector struggling to borrow, but a new era of challenger banks like ours at Allica – who are now responsible for 60% of lending to established businesses – are looking to close the gap. The financial services environment is much more diverse than it once was, meaning there are now options available that could make real changes across the sector.


With a clear aim to support these businesses, challenger banks are often better positioned to assess risk with more flexibility, have sector-specific knowledge and a deeper understanding of the unique challenges these businesses face every day.


I recently worked with a business which runs 24 schools and nurseries across the South East. After being overlooked by the high-street banks, despite a successful model and a well-made business case, they were finally able to refinance existing debt and unlock additional capital on better terms. This gave them the flexibility they needed to continue growing while protecting schools at risk of closure.


I always say to the businesses I speak with: the finance, funding and support needed is still out there, but it requires education leaders to look beyond the high-street. One key piece of advice is to consider what’s available beyond traditional banks when choosing a banking partner. When you work with lenders who truly understand the sector, you can uncover capital and lending opportunities that might have otherwise gone unnoticed.


A curriculum for change


This doesn’t have to be the end of the story for schools. There are several strategic steps education leaders can take to improve their chances of securing finance in today’s tough environment.


Keeping on top of and regularly updating financial records provides lenders with a clearer picture of the school’s position and helps them make better informed decisions and offer loans that best fit the needs of


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the business. Being open and transparent about strengths, challenges and growth opportunities, supported by a clear plan outlining how funds will be invested to drive growth is essential, and can make a real difference when applying for finance.


Beginning funding discussions early is also key. Applications and approvals can take time, so schools should plan ahead, whether the goal is to upgrade facilities, expand classroom space, or invest in new technology - taking into account the time between securing finance and bringing those plans to life is important.


School leaders I speak to tell me they feel discouraged by the ‘one size fits all’ approach often seen among traditional lenders. But there are lenders out there who understand the unique pressures facing schools and can offer funding designed to not only help them stay afloat, but uphold the quality of education that their students deserve.


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