Category: Nonprofit Financing, Finance, Fundraising, Grants & Loans for Nonprofits Articles & Information

There are specific nonprofit lenders who provide loans and funds for nonprofit organizations. This article will serve as a guide to help you save time and money. Let’s put your […]

Eric Coffie, a minority-owned business owner,  has seen it all when it comes to bidding and winning government contracts. Whether those bids are with the state or federal government, Eric […]

If you are now investigating how to get a loan for nonprofits, more than likely there is an immediate need. You will be happy to know there are more options […]

Personal guarantees are a financing tool designed to reduce the risk to a lender if a borrower defaults on a loan or line of credit. As with all things related to risk, personal guarantees don’t eliminate it. They merely shift it from one party to another. In this case, the risk shifts from the lender to the person signing the guarantee.

The crux of the agreement is that the person signing the guarantee, called the guarantor, will pay the lender an agreed-upon amount no greater than the outstanding amount of the loan or line of credit if the borrower defaults.

For various reasons, people tend not to want to be guarantors for a business loan or line of credit. Continue reading to see some of the risks involved in signing as a personal guarantor.

So you’ve gone to one bank and credit union after another looking for a line of credit for your nonprofit and they’ve all turned you down. You don’t understand why. Your financials are in great shape. Your board is responsible and qualified. Your management is top-notch. Plus, you’ve been around for forever and a day.

The truth is that it probably isn’t your fault. Banks and credit unions are extremely hesitant to extend lines of credit or loans to nonprofits for a number of reasons. Keep reading to find out why and what you can do about it.