Who is Lending to Nonprofit Organizations
When running a nonprofit business, you lend a helping hand to those in need. However, when you need help, who is lending to nonprofit organizations?
Since nonprofits do so much good, lenders should jump at the chance to help them continue their mission. In fact, the opposite is true. When it comes to finding out who is lending to nonprofit organizations, you only have a few options.
Why Banks Are Not Lending to Nonprofit Organizations
The banking industry today is not like it used to be. In the past, you simply went to your neighborhood bank, talked to a loan officer familiar with your organization and applied for a not for profit loan. Things have changed.
Banks don’t always measure the creditworthiness of a nonprofit properly when making decisions. For example, since typically only unrestricted funds can be considered as part of collateral, most nonprofit business owners cannot meet a bank’s strict criteria, so they are denied.
Also, banks don’t take a nonprofit’s mission into consideration. They must frequently answer to shareholders first, so numbers are all that matter.
Alternatives Sources for Lending to Nonprofit Organizations
Some choose to borrow money from board members. However, this can be risky for both your organization and executives. It can lead to resentments and accusations, especially if they are not repaid in a timely fashion.
For a better option, turn to a cash advance company, like Financing Solutions (www.financingsolutionsnow.com). Numerous nonprofits come to them again and again when faced with a temporary cash shortage.
With help from Financing Solutions, you can make payroll on time, manage daily operations and start programs. This type of not for profit financing is ideal when waiting for a government grant or donations to come in.
You can get a business cash advance or nonprofit line of credit. Best of all, it is short term nonprofit funding, so you can repay it in a few weeks or months and then get back to business as usual.
What You Need to Know about Nonprofit Lending
With so many rules and stipulations, it’s easy for nonprofits to get something wrong. Fraud can occur quickly if you don’t keep a close eye on employees and volunteers. These tips may serve as a warning to check your own systems and stay on the right side of things.
The first thing you need is a plan to repay any nonprofit loan. Many organizations get themselves in trouble by continuously getting another loan to pay off the prior ones. In addition to discussions about credit reports and what the money will be used for, you must also decide what kind of payments you can reasonably afford. This will help you choose the right lender.
It is also vital to have all the paperwork you will need. In addition to the usual documents, like cash flow statements and balance sheets, a nonprofit will also be required to provide things like bylaws and a resolution of the board of directors.
You should also know that you can get quick nonprofit funding from Financing Solutions. They will provide the right financing at the right time to get you on the right track for success.