Consider when you will need the funding and project plan back from that point, including plenty of slippage time, and taking into account the issues considered below. You should, in ordinary circumstances, assume it will take at least six months or so from initial conversations with banks to draw down.
These will outline the main commercial terms (including interest rate, security requirements, any financial covenants, bank legal and valuation costs and term) from your preferred bank. You will probably invite at least two banks to quote, including your incumbent. Consider how quickly the bank can move from indicative terms to final heads, credit approval and completion, as this process is now highly centralised with little autonomy at local relationship level.
At the outset ensure you have the requisite authority in your constitutional documents to borrow and grant security, and check the process by which your School must authorise borrowing and security - including timing the cycle of governors meetings and powers of delegation to finance committees if relevant. Your governing body minutes will need to be in a form the bank are happy with.
Banks will almost certainly require security over assets (usually land and buildings) for both term loans and overdrafts. If your school is a charity (and you are charging property assets) you will need to obtain a section 124 report from a suitably qualified person to cover whether: (1) the loan is necessary; (2) the loan terms are reasonable; and (3) the charity is able to repay the loan.
This may be an issue for charitable schools which have incorporated as companies limited by guarantee in the past (as most have), but where land is held outside the corporate entity as trustee of earlier trusts. This is a complex issue and beyond the scope of this article, save to flag that if these circumstances arise detailed advice will need to be taken to ensure security can be given, and that conflict issues for governors (who may have split roles as governors and trustees) are addressed.
Although the loan and security standard terms are unlikely to be negotiable to any great extent, you will need to carefully check they reflect the Heads of Terms and that you can deliver on your obligations - whether to meet financial covenants, provide information on time and in a particular format, or comply with prohibitions on prescribed activities without hampering your day to day operations.