Entrepreneurs who are looking to make a difference instead of just a paycheck usually choose to build a nonprofit business. They typically receive lots of encouragement and advice. However, when looking for nonprofit small business loans, they don’t often find the same level of support and resources.
Looking for nonprofit small business loans can seem like searching for a needle in a haystack. Fortunately, you do have options.
Why Banks Are Reluctant to Provide Nonprofit Small Business Loans
Bank loans for nonprofits are hard to come by for one simple reason: most banks don’t fully understand nonprofits. When they don’t know enough about what you do, it is risky for them to loan you money. Those in charge of approving bank loans practice risk management and they will consider your organization too big of a danger to their bottom line.
Also, since the bulk of your money may come from donors and government sources with specific goals for the funds, bank executives can’t comprehend how you will repay the nonprofit loan. All this combines to create an uphill battle for obtaining loans for nonprofits.
Are There Alternatives to Nonprofit Small Business Loans?
You may think that nonprofit funding grants and 501c3 loans are your only option for funding, but this is not true. You just have to know where else to look.
Business cash advance companies, like Financing Solutions (www.financingsolutionsnow.com), can help. They work with nonprofits all of the time to provide cash advances or lines of credits when others may have said no.
The fast business funding you get from Financing Solutions can be used for any business purpose, such as making payroll or starting programs while waiting for a government check to come in. Best of all, there is no long term commitment. They offer flexible repayment options that allow you to repay the money in a few weeks or months, without early payment penalties.
Looking to Innovate Your Nonprofit?
Nonprofit organizations solve major problems in our communities and on our planet. Still, for the small business owners who run them, it can seem like all this must be done with one hand tied behind your back. The key is to use innovation to help level the playing field.
One thing you should work to change is the mindset surrounding not for profits. What you do is more vital than your tax status. Instead of focusing on money, you should stress results, which are more important. For example, if you usually highlight how much money you raised, change things by showing how many lives were affected by your work this year. These are the kinds of “profits” that resonate more with donors, volunteers and government organizations and may make it easier for you to attract support and dollars.
Also, don’t be afraid to invest in marketing initiatives. You cannot be successful if people don’t know who you are and how they can help your mission. Many nonprofits don’t like to do this because they worry about having too much overhead. This can be offset in different ways, such as having donors underwrite your administrative costs.
Of course, the best way to innovate your nonprofit is to contact Financing Solutions. They will give you the not for profit financing you need to take your organization to the next level.
If your nonprofit would like a line of credit that you can use when cash flow is down please visit www.fscreditline.com/np to learn more, to apply and to receive a written offer. A Line of Credit for your nonprofit costs zero to set up and zero until you use it, making it an excellent backup plan.
