Early Childhood Education

Financing Guidelines

TRF’s financing will be subject to all terms and conditions typically required by TRF for early childhood facility projects, as well as ones unique to a particular transaction. The terms presented below are typical of TRF’s financing but vary according to specific project and borrower circumstances and the availability of TRF’s capital for special lending programs.

Providers:	Non-profit and for-profit child care centers
Uses:	Predevelopment Acquisition Construction/Renovation Leasehold Improvements Energy-Efficient Improvements Permanent
Amount:	Up to $2,250,000 (more on a case-by-case basis) Determined by the cost of the project, the availability of collateral, the borrower’s financial history and the borrower’s ability to repay
Rate:	Varies by product and term Predevelopment loans -- 2% Acquisition and Construction loans -- Prime + 1% Fixed and floating rate options available for Permanent loans Energy loans -- 5% to 6%
Term:	Predevelopment, acquisition or construction loans: Up to 12 months Permanent loans: 5 to 15 years; amortizations up to 15 years Leasehold improvement loans: Loan term not to exceed term of lease
Advances:	Construction advances for work-in-place as verified by a TRF inspector, subject to 10% retainage
Collateral:	Mortgage or leasehold mortgage Security interest in personal property Personal guarantees may be required for for-profit entities
Repayment:	Interest only during predevelopment and construction, with committed permanent take-out Permanent loans may require balloon payment at maturity
Fees:	1% for construction; 1% for permanent Borrower pays all of TRF’s costs in closing the transaction, including, but not limited to, outside legal costs, recording fees, search fees, title insurance, appraisal fees, plan review, inspection costs and environmental assessments

Loan Criteria

TRF will underwrite and structure a loan by considering the strength of the borrower and project, as evidenced by the following:

Strong financial condition of borrower and, if applicable, guarantor
Good financial systems and reports
Management experience and depth
One year of operating experience or strong business plan for start-up
Loan to value ratio < 90%, based on satisfactory appraisal
Loan to project cost < 90%, for leasehold improvements
Debt or lease service coverage ratio > 1.2x for five year operating projections
Stable enrollment at projected levels or strong enrollment plan
Evidence of quality child care services

Questions? Contact CommunityFacilities@trfund.com or call us 215.574.5800.