Will a Bank Look at Nonprofit Financials for a Line of Credit
When you look deep into the details of your nonprofit organization, you understand everything better. One of the things you may discover is the need for fast nonprofit funding. As a result, you will likely turn to a bank for it, but you are only setting yourself up for disappointment. A bank will look deep into your nonprofit financials and most likely deny your application for a line of credit.
To run a nonprofit, you must look doubt, fear and frustration in the face every day. Unfortunately, you will also see defeat. This comes when a bank looks at your nonprofit financials and decides they can’t help you. Thankfully, you do have other options.
What Happens When a Bank Looks at Nonprofit Financials?
Every nonprofit need some form of not for profit capital to bridge the gap between revenue and spending. Thanks to tighter funding criteria from government grant providers and dwindling donations from the public, they now have to turn to banks and other lenders for support.
Regrettably, banks are often unwilling to lend a hand (or a nonprofit 501c3 loan). Yes, a bank will look at nonprofit financials. And unless you have collateral to back up the nonprofit business loan, a bank will not approve you.
They also make the mistake of looking at the wrong nonprofit funds. The simple truth is that banks don’t understand nonprofit financials. For example, they look at both funds that have restrictions as well as those that don’t. Consequently, they judge repayment ability on the wrong criteria.
In addition, commercial banks sometimes confuse the mission of a nonprofit with its capability. They may not hold the nonprofit to the same reporting standards as a for profit business. This leads to confusion, delinquency and bad publicity.
When Looking at Nonprofit Financials is a Good Thing
While nonprofits are, at the end of the day, a business, they are still different. You need to find an alternative financing company that realizes this. For many nonprofits, that company is Financing Solutions (www.financingsolutionsnow.com).
At Financing Solutions, they will look at your financials. However, since they are the number one provider of nonprofit lines of credit in the U.S., they actually understand how your financials work. As a result, it’s more than likely that they will approve your application.
Most importantly, they will not require collateral nor a personal guarantee (unless in the cases of fraud) to get funding for your nonprofit. Best of all, you can use the money you receive for any business purpose. This includes making payroll, dealing with uneven cash flow or starting programs on time while waiting for donations or grants to come in.
Small Ways to Make Your Nonprofit Look like a Big Deal
Improve your website – this can make all the difference for people and organizations looking to give money. Professional looking content, a few videos and easy navigation will go a long way.
Use the right language in all communications – something as basic as using the word “we” instead of “I” sounds more inclusive. You can incorporate this tactic in everything from brochures to social media platforms.
Find the best funding resources for your nonprofit – without money, even the realistic becomes impossible. Trust Financing Solutions to take your organization from good to great.