Existing Nonprofit Sector Using Line of Credit to Help Even Cash Flow
You hear a lot of talk about the private sector’s effect on the economy and public sector revenue. But what is being said about the nonprofit sector? Now, more and more people are discussing how existing nonprofit sector companies are using a line of credit to help even cash flow.
No matter what kind of business you own, cash is king. It’s the reason more than half of small businesses don’t survive past their fifth anniversary. Thankfully, the existing nonprofit sector can get a line of credit when facing cash flow issues.
Why a Cash Flow Statement is Crucial for the Nonprofit Sector
Any 501c3 organization needs to keep a close eye on cash coming in and going out. It should not be confused with the income or profit and loss statement. Basically, a cash flow statement shows exactly how much cash you have available to spend. This is very important to know for paying bills, making payroll and managing emergencies.
Since it is possible to have a positive cash flow but still be facing a loss, the statement counts things such as interest income and credit. Additionally, it helps your organization be more transparent and may be required by each grant provider and funding agency.
Where Can an Existing Nonprofit Sector Go for a Line of Credit?
A line of credit acts as a supply of money you can draw upon whenever you need it. Many nonprofits have found that the best place to go for one is a business cash advance company, like Financing Solutions (www.financingsolutionsnow.com).
Cash flow problems happen all the time for nonprofits, as you wait for donations to come in but still must pay your bills. Financing for established nonprofit organizations can be difficult to come by. With Financing Solutions, you can get a line of credit quickly and easily.
To qualify, you must be an existing non profit with at least $350,000 in yearly revenue. Best of all, the line can be in place for up to 12 months.
Knowledge Every Nonprofit Sector Organization Must Know
These days, nonprofits don’t have it easy (if they ever did). They are expected to solve all of society’s ills with an always shrinking budget. To top it all off, there are also numerous rules and regulations to worry about to make sure you stay on the right side of the law.
One of the most important things you must be aware of is the new federal rules concerning employee overtime, which go into effect in December 2016. First, you need to find out if your organization or employees are covered by the Fair Labor Standards Act and, if so, whether you are in compliance. If you are not, you could be hit with penalties and paying back wages.
You must also know the best ways to manage your board governance. Having board members that are not willing to raise money, are resistant to diverse ideas or with no term limits is a recipe for disaster. It is wise to have frequent conversations about your expectations and not be afraid to part ways with those who can’t keep up.
Of course, to really grow your business, you need to know that Financing Solutions has the financial products to help you with cash flow problems. With their nonprofit business funding, you can focus less on money woes on more on making your business thrive.