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From early years to university, quality education has a profoundly beneficial effect on society. For some education providers, though, delivering financially sustainable education programmes is challenging.
Early years nurseries have struggled to deliver the ‘free’ childcare hours to parents, which were introduced by the government to facilitate a return to work. At the other end of the scale, the government’s Skills for Jobs initiative has taken the emphasis away from a university education.
The alternative for school leavers is gaining technical qualifications at colleges and in other further education settings, which from the universities’ point of view could negatively impact student numbers.
Tailored funding options for the education sector help to protect high standards and allow the delivery of quality education in all settings. UK Business Finance are funding specialists and can help to find the best type of finance for education providers.
Soaring energy costs
The rising cost of energy affects all educational establishments and with many energy suppliers withdrawing their fixed tariffs, budgeting with any certainty is difficult. Cost pressures can result in reduced facilities, spending cuts, and larger class sizes.
Investment required by universities
Universities may need to invest in the provision of new types of courses and collaborate with local further education colleges if their numbers fall. Alternatively, they can try to attract more students by upgrading or expanding their facilities, which would also require considerable investment.
Cost of living crisis affecting independent schools
The rising cost of living is affecting independent schools directly via increased operational costs, but also indirectly due to parents feeling the negative effect on their own finances. A rise in tuition fees may be the answer in some settings but could be risky where household budgets are already squeezed.
Working capital finance
Working capital finance is commonly used to cover outgoings associated with a development or growth project. It is a short-term form of financing and helps educational establishments to function more effectively on a day-to-day level when a development project is ongoing. It can cover the additional demands on working capital, for example, which might include expenditures such as wages, supplies, or utilities.
Asset finance helps education businesses to access expensive assets without the need for capital outlay. It includes hire purchase and finance leases, which spread the cost of the item and make the investment more affordable. Hire purchase also allows for full ownership of the asset at the end of the agreement.
Commercial property finance
Commercial property finance includes business mortgages that work similarly to residential mortgage loans. Owner-occupier commercial mortgages may be used to fund investment in new educational buildings on an existing site, for example, or in a new setting.
This type of finance can be used to fund teaching aids such as computers and laptops, or gym equipment. Equipment hire purchase and equipment leasing involve spreading the cost of the equipment over an instalment plan, with the option to take ownership of the asset at the end of a hire purchase contract.
UK Business Finance are well-established commercial finance brokers and we understand the criteria of all lenders in the UK. We will guide you towards the best funding option for your business needs and offer our services free of charge.
Please contact our expert team for more information on how to finance your education business.
How we help other Sectors
We work across a wide range of sectors throughout the UK, providing specialist advice to each sector.
Can I use property as security for a business loan?
Secured business loans require one or more assets to be put forward as collateral. This protects the lender from financial loss if a company cannot afford to keep up with the repayments at any stage.
Does my company have a credit score and how can I improve it?
Limited companies do have credit scores and they’re used for a similar purpose as individual credit ratings. Lenders use them as a guide to creditworthiness, but a business credit score is also useful for suppliers and investors to gain insight into your company’s financial situation.
What is bad debt and how can I protect my company?
Bad debt presents an insidious threat to the financial stability of your business. It places strain on your working capital and creates uncertainty in paying your bills, but this can be addressed successfully if you take proactive steps to protect your company.
What is the difference between open and closed bridging loans?
Bridging loans are short-term forms of secured finance that literally ‘bridge’ a gap between funds going out of a business and monies coming in.