SBA Guide for Non-Profits

You may be wondering if non-profit organizations can benefit from the services offered by the Small Business Administration (SBA). While some of its services are more aligned with those of use to for-profit enterprises, non-profit organizations can also make use of some of its offerings.

What is the SBA?

The Small Business Administration (SBA) is an agency of the United States federal government. Its mandate is to assist small American businesses with launch, survival, expansion, growth, and recovery. It does this by providing eligible American small businesses with access to resources and funds. These resources include things like online courses and access to skilled coaches and counselors. Funds can include grants, loans, disaster relief, and even microloans for entrepreneurs. Some of these resources can be helpful in education for non-profits as well.

The SBA has also launched and grown many nationwide initiatives over the years that are designed to help raise awareness of small businesses and the issues they face. These issues are often similar to issues a nonprofit might go through.  National Small Business Week, National Veteran’s Small Business Week, Small Business Saturday, and the Rural Lending Initiative are just the tip of the iceberg when it comes to the SBA’s national advocacy efforts.

 

How to Contact The SBA

To learn more about the resources offered by the SBA, the first thing to do is contact them. The easiest way to do that and the easiest way to get access to many of their resources is to access their website at sba.gov. The site contains many informational resources as well as contact information for local and regional centers.

Local & Regional Centers

The SBA also maintains country-wide local, regional, and district offices. A non-profit can access training, counseling, and business development resources to plan, launch, maintain and grow a small business.

SBA Learning Center

The SBA is more than a source of money. It provides extensive material for learning about small businesses and developing your own firm. The Learning Center on the SBA’s website offers resources for handling your small business. There are courses on everything from the challenges faced by female entrepreneurs to how to apply for government contracts. The courses are divided into four categories:

• Planning to start a business
• Launching a new business
• Managing an existing business, and
• Growing an existing business

These four categories address most of the issues a prospective or current small business owner or a non-profit leader might encounter over the life of the small business.

Other Learning Resources

The SBA’s knowledge resources aren’t limited to its website. Initiatives like its Emerging Leaders program provide hands-on training to the leaders of businesses, including non-profits, that meet certain revenue and size criteria. Training initiatives like this help the leaders of non-profits grow their businesses to unprecedented new heights.

Nonprofit Funding

As a rule, nonprofits, also known as 501(c)(3) companies, do not qualify for loans from the Small Business Administration. This is unfortunate, given that SBA loans are frequently coveted for their lower interest rates and more favorable terms. The SBA effectively guarantees these loans, made by a third-party creditor, allowing the lender to better manage risk and offer better terms.

That said, there are a few niche areas where the SBA might still offer funding to non-profits. It operates a granting system where intermediate companies offer grants to qualifying non-profits in pre-defined geographies and industries. While there are several hoops to jump through and a long list of criteria to meet to qualify for them, grants are ideal for small non-profits trying to make a difference. They do not need to be paid back, require no interest payments, and the only downside is the administrative fees.

Disaster funding is sometimes available for areas hit hard by acts of God like floods, fires, and hurricanes. If you’re unlucky enough to find yourself in the path of one of these disasters, the SBA might be the agency to turn to for help recovering.

Non-SBA Sources of Funding

Because SBA-guaranteed loans are usually unavailable to non-profits in the United States, they frequently have to turn to other sources of funding. These alternative sources are tricky to find because some private, for-profit enterprises are reluctant to lend to non-profits. That said, companies like Financing Solutions, a leading provider of business loans for nonprofits in the form of a 501c3/not-for-profit line of credit,

offer non-profits a reasonably-priced line of credit that can be used for both unexpected emergencies and regular cash-flow timing issues. The best thing about their Line of Credit program is that it costs nothing to set up and nothing until it is used making it a great cash backup plan. The line also requires no personal guarantees or collateral.

Non-SBA Sources of Learning Materials for Non-Profits

The SBA gears its information towards for-profit entities. For those who are looking for more focused information specific to non-profits, consider the National Council of Non-profits. This advocacy group provides a lot of curated resources specifically for the non-profit leader. If you’re looking for information to help you grow your non-profit organization, you won’t find a better place than this.

Coronavirus (COVID-19) Update

The Small Business Administration provides invaluable services to thousands of small businesses across the country every day. While primarily focused on for-profit enterprises, the SBA does provide learning materials and some narrow sources of funding, like grants and disaster relief, to non-profits around the United States.  The new disaster relief that is being provided by the SBA also includes relief for non-profits. That information is constantly being updated, and it may take a bit for non-profits to receive funding.

Similarly, the SBA’s advocacy work on behalf of all small businesses benefits small non-profits as well. Initiatives like Small Business Saturday can and do have an impact on smaller non-profits all over the country.

For those looking for knowledge resources about non-profits specifically, there are plenty of sources out there. If you’re involved in a non-profit and looking for SBA disaster relief loan funding, you may be better served by approaching a company like Financing Solutions and perusing their non-profit line of credit. Financing Solutions helps non-profits secure the funding solutions they require.