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Financing for a Nonprofit Organization

Financing for a nonprofit organization is not about making money. You must develop a strategic approach for how you will build capacity, fund all your activities and expenses and achieve your mission and yes, even a nonprofit needs some form of financing sometimes. Crucial Aspects about Financing for a Nonprofit Organization that Every Leader Should Know

How can you do all this, while still applying for grants, managing government relations, courting donors and running your programs? The answer is in not only finding 501c3 financing, but finding the right financing for a nonprofit organization.

Why is it hard to Get Financing for a Nonprofit Organization from a Bank?

Most people who are not in the nonprofit world don’t understand nonprofit organizations. This includes banks.

For example, they don’t realize that a nonprofit is really a business that’s just serving its clients. And like most businesses, it will eventually need financing for a nonprofit organization.

Banks don’t want to give a LOC to a nonprofit. In fact, banks don’t like working with any business that doesn’t have at least $15 million in yearly revenue.

Commercial banks don’t understand nonprofit financing. They expect you to have 100 percent collateral to back up the nonprofit loan. Factors like funds that have restrictions which prevent you from using them as collateral may be a foreign concept to them.

Why is Financing for a Nonprofit Organization So Important?

In addition to running programs, you also have to run your nonprofit organization. This includes paying the utility bills, securing vendors and always making payroll on time.

All it takes is a reduction of funding from one donor or a grant that doesn’t arrive when you expect it to make it all come crashing down. Add to that the fact that many donors and granting institutions prohibit you from using their money for overhead. It doesn’t take long to recognize you’ve got a real problem.

More than just grants and donations are needed. Sometimes, you must consider alternative financing sources.

Where is the Best Place to Find Financing for a Nonprofit Organization?

Unfortunately, all not for profit financing providers are not equal. Neither are all types of nonprofit funding. A line of credit is perfect because it is there when you need it.

Financing Solutions (www.financingsolutionsnow.com) is the number one largest provider of lines of credit to smaller nonprofits. This means those with revenue over $300,000 and under $7 million.

With Financing Solutions, you can get the money you need to manage uneven cash flow. This is critical for the success and survival of your nonprofit.

Best of all, they make the process quick and easy. You can begin by answering a few simple questions online. Then, you will receive an offer letter within a few hours to explain how much money you are eligible for.

If you decide to proceed, only then will they check your credit. After providing some easily available supporting paperwork, you can have the money you need in less than 48 hours.

Crucial Aspects about Financing for a Nonprofit Organization that Every Leader Should Know

What are your actual costs – playing guessing games will destroy your budget. Calculate the true costs of everything it takes to accomplish your goals. Hoping and praying that you will balance the books this time is no substitute for a solid financial plan.

Does everything you do support your mission – it’s vital to put your money where your mouth is. Don’t say you want to have a stronger organization and then put monies elsewhere. Invest in the right people, tools and technology to get you there.

How can you achieve financial sustainability – in addition to organizational stability? This takes help with planning and not for profit funding from Financing Solutions.


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