Can a Nonprofit Get SBA Loans
The Small Business Association (SBA) has an important role in providing access and opportunity for small businesses. A not for profit is a small business, so it begs the question: Can a nonprofit get SBA loans?
Approximately half of the American workforce works for small businesses, including nonprofits. As the backbone of our nation, these businesses need help and support, such as a SBA loan. Sadly, this resource is not available to nonprofit businesses.
Why Can’t Your Nonprofit Get SBA Loans?
So, does the SBA provide 501c3 business loans? The simple answer is no. SBA loans are not for nonprofits.
The most you can find about SBA loans and not for profits is their Microloan program. This provides SBA loans to nonprofit intermediaries and these companies then offer loans only to nonprofit child care centers. The rest of the monies in the program go to for profit businesses.
In other words, these companies get SBA loans and then dole out the money to other companies. Even if your business does fall into this category, you should be aware that there are numerous terms and restrictions. For example, the term for these loans is about six years. It’s also a secured loan, which means it requires you to pledge collateral.
All eligibility requirements and creditworthiness decisions are made by the intermediary, not the SBA. In addition, there are various fees from the lender that you will have to pay. Worst of all, it could take months for you to receive your money.
Is There an Alternative When You Can’t Get a SBA Loan for a Nonprofit?
Financing Solutions (www.financingsolutionsnow.com) offers a line of credit for nonprofits. The criterion is simple and they are very easy to get. You must have at least $300,000 in yearly revenue to qualify. In addition, someone on the board or an officer must have a 650 or greater credit score to be approved.
Best of all, it’s easy to set up. It only takes a 15 minute phone interview to start.
More importantly, you can repay the money fast. Unlike banks, there are no penalties for early repayment. You can pay back the money as soon as your government grants or donations come in. This represents your best option for short term nonprofit financing.
Can Your Nonprofit Go from Small to Super Successful
As a small nonprofit organization, you may often feel like everything is going against you. Competing with the big guys can make you weary and create disenchantment. But can you fight all this and make your organization a superstar?
The answer is yes. Here are some tips to help you.
Use technology to your advantage – although you have to do more with less, this doesn’t have to be a barrier. You can use technology to better manage data and work smarter instead of harder.
Make your communication more personal – use your small size to your benefit. You have the ability to reach out to donors individually and make them feel special, so use it.
Get the right source for 501c3 financing – look no further than Financing Solutions. They will give you the fast nonprofit funding you need to go from good to great.