Can a Nonprofit Get a Loan
At Financing Solutions (www.financingsolutionsnow.com), they get calls from many executive directors of nonprofits who often ask, “Can a nonprofit get a loan?” The answer is yes but it’s not always so simple. It really depends on where you apply and the management of your organization.
How Can a Nonprofit Get a Loan from a Bank?
Most commercial banks will not work with nonprofits. For one thing, they are too afraid of the negative press they could receive if they have to seize the assets of a nonprofit that cannot repay their business bank loan.
In addition, commercial banks don’t understand nonprofit organizations from a business standpoint. For example, they can’t fathom why nonprofit organizations often do not have the kind of collateral that a bank would want to back up the 501c3 loan.
Banks want someone to sign for the nonprofit loan personally, which means a house will need to be put up as collateral. In fact, according to a recent survey, banks deny more than 70 percent of the loan applications they receive from not for profits and small businesses.
How Can a Nonprofit Get a Loan from Other Sources?
It’s important to note that your nonprofit may not need a loan at all. Financing Solutions (www.financingsolutionsnow.com) has a line of credit for nonprofits that directly addresses all of your challenges.
At Financing Solutions, their largest customer base is nonprofit organizations. Companies turn to them again and again because this is a lender they can trust. The fact that they have a 5 star rating from the Better Business Bureau is an added benefit.
Since they understand the workings of nonprofits and the trials executive directors face daily, they are able to tailor their nonprofit line of credit program around you. For instance, they know you don’t have enough time in the day, so their fast and easy application takes just a few minutes to complete.
Because they know it is illegal to deny or delay payroll, this not for profit funding can be used for any business purpose. This includes starting programs on time, handling emergencies and yes, meeting payroll.
What Are the Benefits of a Line of Credit?
- Their line of credit costs nothing to get in place and nothing until you use it.
- They don’t ask for personal guarantees (except in the cases of fraud).
- You will have a written quote to consider the same day you apply. If you decide you want to move forward, they will ask for board resolution, bank statements, 990, voided check, and your driver’s license.
- They set you up with a customer portal, making it easy to request funds at any time and to be wired into your bank account. You can also call or email them at any time.
- You can pay off balance at any time with no early payment penalties.
A line of credit for a nonprofit is one of the most valuable tools you should have. Whether you frequently experience uneven cash flow or want to take advantage of new opportunities, having 501c3 funding from Financing Solutions can be your lifeline.