The Authority gives schools short-term loans (usually less than a year) called Certificates of Indebtedness to help cover temporary cash needs. A school district can only borrow up to 5% of its previous year’s ending budget, plus the largest amount it was short in any one month.
Through its School Construction Financing Program (SCF), the Authority also provides loans to school districts for building or renovation projects—things they would normally fund by issuing bonds. As long as the district meets credit and program requirements, it can borrow any amount needed.
The interest rate a school pays on these loans is based on current market rates. These rates are determined through a competitive bidding process when the Authority raises money by selling its own bonds. The rate the Authority pays on those bonds is the same rate the school district will pay on its loan.
The SCF has been assigned a rating of "AA-" by Standard & Poors Ratings Group.
For more information about the program or applying, please contact our office.