Microschooling has taken off since the pandemic. These small, personalized school models today enroll over 1 million K-12 students seeking flexibility, intimacy, or a particular instructional model. The growth has raised a host of challenges. The biggest may involve financing and growing these new models. On that score, I’m intrigued by a first-of-its-kind program called The Lending Lab, which helps microschools access the resources they need. Allison Serafin oversees The Lending Lab and serves as chief strategist at Building Hope. Previously, she founded IDEA Charter Schools in Greater Houston and served as vice president of Nevada’s board of education. I recently had the chance to chat with Allison about The Lending Lab. Here’s what she had to say.
—Rick

Rick: Allison, so what exactly is The Lending Lab?

Allison: The Lending Lab is the Building Hope Impact Fund’s lending initiative for small, independent, and private schools. We saw that small schools need more than encouragement; they need financing, clear expectations, and financial discipline to grow. Last year, we opened a 30-day pilot window and received 258 interest forms from 36 states. Eleven schools were approved, resulting in $410,000 in loans. They ranged from brand-new launches to schools in their fourth year and served both urban and rural communities. This year, we’re offering term loans ranging from $10,000 to $50,000, generally priced at 5%-6% interest. We’re also adding a line-of-credit option for schools with at least one year of operating history. Think of that as flexible access to cash, similar to a credit card, but at a significantly lower interest rate. The goal is to pair responsible lending with the tools, expectations, and support school leaders need to borrow money wisely.

Rick: For someone who’s not familiar with microschools, can you talk a bit about the schools you’re serving?

Allison: I prefer to call them small schools because words matter. “Micro” can make them sound like side projects. These are real schools serving real families. The founder is dealing with the same hard stuff as any school: enrollment, staffing, facilities, compliance, payroll, and cash flow. Small does not mean unserious. It means there is less margin for error.

Rick: Walk me through the application-to-approval process. How does the program work in practice?

Allison: We start with a simple question: Can this school take on debt responsibly? We look at the legal entity, the financial model, enrollment demand, the facilities, and whether the founder operates with financial discipline. If the school clears our initial screen, we verify the numbers, talk with the founder, and pressure-test the plan. For selected applicants, the process is meant to be clear and professional. They receive a term sheet, connect their business bank account, and stay connected through regular check-ins.

Rick: You’ve written that 80% of your initial applicants didn’t meet basic underwriting criteria. What does that mean, and what kinds of issues did you encounter?

Allison: It means many applicants were not yet ready to take on debt, not that they were unserious. Starting a business is hard. So, I was not shocked that many applicants came in before their financial models, enrollment assumptions, or repayment plans were airtight. We decided to build a screening process that does not just reject people. It routes them to the right support at the right time. If the financial model is not ready, we point them to a budgeting tool we built for that exact purpose. If the facility is not secured, we route them to a space-readiness tool. The goal is to build a pipeline, not a wall.

Rick: Who are your applicants? I imagine that many are educators and more than a few are already running schools. But what have you seen?

Allison: They are a mix, and that is part of what makes this work so interesting. Some are experienced educators launching schools for the first time. Some are parents who have spent years researching what kind of school they want for their children and took the plunge to launch the school themselves. Some are already operating a school and trying to grow. Some applicants are still very early in the process of starting a school but already have unusual clarity about the families they want to serve. The school models are incredibly varied. We saw faith-based schools, home school cooperatives, classical schools, science- and technology-focused schools, adaptive learning environments, Montessori schools, and credit-recovery programs.

Rick: What are the applicants using these loans for?

Allison: Many were trying to solve very practical problems: securing space with a lease deposit and a few months of rent, investing in tenant improvements to bring a space up to code, stabilizing cash flow, or making early growth more manageable. That told us the gap in the market for small school lending was real.

Rick: Building Hope’s been funding charter schools for a long time. Is this an extension of that work or something different?

Allison: Our core business is deeply rooted in launching and growing quality charter schools nationwide. That has not changed. Lending Lab reflects our desire to support early-stage leaders in another part of the school choice field. We think small school founders are facing many of the same challenges that charters faced in their early years, particularly around financing. At first, banks did not know how to underwrite charter school loans—meaning assess their risk and set an appropriate interest rate—because charters were so new and the market hadn’t caught up.

Rick: Say a bit more about that. I remember when loan underwriting used to be a big issue for charters. What’s the challenge for banks lending to these schools?

Allison: The incredible variety among small schools is a big challenge for lenders. Charter schools, for all their complexity, usually operate within a common framework: authorizer oversight, audited financial statements, and board governance. There’s much more variety among small schools, which is part of their strength. We do not want to flatten that. Rather, we see an opportunity to standardize the information we ask for, so founders can keep building distinctive models and lenders can better assess risk.

Rick: You’ve noted parallels between microschools and the early days of charter schooling. What other similarities do you see?

Allison: The main parallel I see is that the entrepreneurial energy is ahead of the infrastructure. That was true of charters in the early days, and it’s true of small schools today. The founders are out ahead. The tools, money, and support are still catching up. But we do not have to wait for the market to catch up on its own. Building Hope is raising capital with a goal of deploying $1 million in small school loans this year, thanks to the generosity of philanthropic partners like Stand Together Trust and the Beth and Ravenel Curry Foundation.

Rick: If you had one piece of advice for an educator thinking about launching a microschool, what is it?

Allison: Do not wait until you need money to get organized. If you can fund your school yourself, you have a lot of freedom. The minute you need outside capital, financial-management rules kick in. I say that with real affection for these founders because I admire them. Running a small school is hard. Running a business is hard. Doing both at once is very hard. Small school founders deserve better tools, clearer expectations, and lenders that take them seriously.

This conversation has been edited for length and clarity.