HJ Sims Provides Start-Up Charter School with Working Capital Funded Entirely by HJ Sims’ Private Wealth Management Clients
“We were in an impossible situation in preparing to open Cincinnati Classical Academy, since charter schools in Ohio do not receive operational revenues until several weeks after opening. Fortunately, we found HJ Sims, who carefully considered our situation and stepped in to help. They worked diligently, in a short amount of time, to craft a financial instrument and loan our school a million dollars to cover our start-up costs. With these funds, we were able to hire faculty, purchase curriculum and furniture, and make all other preparations for school opening, which was a great success. HJ Sims worked with us to deliver favorable terms for the loan and develop a repayment schedule that was tailored to our financial projections, thereby minimizing our interest costs. Their communication and commitment was outstanding, with twice weekly meetings over a couple months to be sure that our needs were met, and that the loan was delivered on time. They even showed great understanding and flexibility in accommodating several change requests when our financial situation evolved and the goal posts were moved. I would definitely recommend HJ Sims and am grateful for the efforts of all their team. Thank you Jeff, Rob, Rich, Kyle and Melissa!”
— Dr. Jed A. Hartings, Board President
Cincinnati Classical Academy (“CCA”) is a new public charter school coming to the Cincinnati, Ohio area in the fall of 2022. CCA has been granted a six-year charter to operate by St. Aloysius, an authorized sponsor in the state of Ohio. At the beginning of their first school year, CCA had over 460 students in Kindergarten through 6th grade.
CCA will provide an American liberal arts education through a classical curriculum in partnership with Hillsdale College. While discussing financing options with CCA, HJ Sims bankers became aware that CCA needed working capital to cover start-up costs including furniture, books, equipment and other operating expenses as payments from the state would be paid in arrears. HJ Sims went to work to find financing for CCA.
When it became apparent that bank financing was not an option, HJ Sims agreed to privately place a taxable loan of $1,000,000 to fund start-up capital. Prior to placing the loan, an affiliate of HJ Sims advanced $700,000 to help CCA with immediate expenses.
The 2022 loan is structured with a 15-month term, quarterly interest payments and period principal payments of $250,000 each.
While CCA, as a start-up, had a challenging time getting a bank loan to finance start-up capital, the HJ Sims team worked with its Private Client Group to create a mutually beneficial solution that accomplished CCA’s key goals.
While the HJ Sims’ placement was being contemplated, an HJ Sims affiliate assisted CCA with some immediate cash needs. The privately placed loan was tailored to meet the needs of CCA and provided sufficient flexibility to allow the school to focus on its opening and not its capital needs.
In August 2022, HJ Sims closed on the $1,000,000 private placement, with the entire taxable note funded by private wealth clients of HJ Sims. This loan helped CCA purchase needed furniture, supplies, and materials to open on time for the 2022-23 school year.
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