Most nonprofits struggle to get reliable funding sources that align with their mission. Unlike for-profit enterprises, many financial institutions are uncomfortable with advancing loans to nonprofit organizations because they are not profit-oriented, making it difficult to fund their programs and operations effectively.

Many lending institutions are skeptical about providing financial assistance to nonprofits because they believe nonprofit organizations typically don’t have the same revenue-generating potential or collateral as other businesses. Unarguably, loans are repaid with interest, which is how financial organizations make profits. And since nonprofits are hugely mission-driven and always plow back any surplus funds into their programs and operations, they might be unable to repay loans, so the argument goes. 

Notwithstanding the prevailing perception about nonprofits, some credit unions still work with them to ensure they have the financial flexibility to carry out their numerous programs and sustainably keep their operations running. Knowing the specific credit unions that suit your nonprofit’s funding needs is the first step to ensuring your organization’s financial freedom. Read on to learn about these lending institutions. 

Why Nonprofits Choose Credit Unions

Nonprofits often gravitate toward credit unions for several compelling reasons:

  • Shared Values: Credit unions are deeply embedded in the communities they serve, focusing on financial education, community development, and social responsibility. These priorities resonate with the values that drive many nonprofit organizations.
  • Lower Fees: Nonprofits are typically working with tight budgets and every dollar counts. Credit unions often offer lower fees and better interest rates compared to traditional banks, helping nonprofits stretch their resources further.
  • Personalized Service: The personalized touch of a credit union can make a significant difference for nonprofits. Credit unions are known for building strong relationships with their members, and providing tailored financial solutions that meet the unique needs of each organization.
  • Community Focus: Credit unions often reinvest in the local communities they serve. This focus on local impact makes them ideal partners for nonprofits that are also working to improve their communities.

List of Credit Unions that Work with Nonprofits

Below are the various credit unions that work with nonprofits. You should do your due diligence before deciding on the one to choose. 

Verity Credit Union

Verity specializes in supporting nonprofit organizations with financing needs and understands their unique situations. It has earned a reputation for its commitment to helping nonprofits within the community it serves. Their dedicated team understands the specific financial needs of nonprofits. It offers specialized services, term loans, lines of credit, commercial real estate, business credit cards, and auto loans for business vehicles. Verity Credit Union takes pride in building long-term relationships with nonprofits, helping them achieve their missions while providing personalized attention and guidance.

First Service Credit Union

First Service Credit Union has a long-standing history of supporting nonprofits by offering various financial services tailored to their needs. They provide low-cost banking services at competitive rates, including checking and savings accounts, merchant services, and business loans. 

First Service Credit Union understands the call to service, so they grant nonprofit organizations special benefits like no monthly charges and minimum balance requirement. They make banking simple so nonprofits can stay focused on their mission. Their savings help your nonprofit get through financial challenges during rainy days to keep your operations running. And with no minimum balance requirement, you can save with confidence.

Self-Help Credit Union 

To boost your nonprofit operation, expand, purchase equipment or a building, or embark on renovations, you can consider Self-Help Credit Union’s financial products. They are poised to support nonprofits’ missions with financing that makes good business sense. However, they can only offer loans under $500,000 to Illinois and North Carolina organizations. What is more, Self-Help Credit Union looks for the following criteria when granting loans to nonprofits, and these include experience, creditworthiness, cash flow, collateral, personal debt-to-ratio, and collateral.  

First Community Credit UnionCredit Unions that work with nonprofits

First Community Credit Union places community development at the heart of its operations. By partnering with local nonprofits, they offer financial products and services designed to address the unique challenges faced by these organizations. Whether it’s offering competitive interest rates on loans tailored towards specific programs, First Community Credit Union is dedicated to empowering nonprofits to succeed. With no monthly service and transaction fees, their Nonprofit Savings and Checking accounts are ideal for helping your organization’s financial future.

First Tech Federal Credit Union

First Tech provides a wide range of financial products for nonprofits, including business checking accounts and loans. Known for their commitment to technology and innovation, they offer tools that can benefit tech-savvy nonprofits looking to streamline their operations.

Alternatives Federal Credit Union

Alternatives Federal Credit Union goes beyond traditional banking, offering specialized accounts and loans for nonprofits, as well as financial education and planning services. Their focus on economic and social justice aligns closely with the missions of many nonprofits.

Boeing Employees’ Credit Union (BECU)

BECU provides business banking services tailored to nonprofits, including checking and savings accounts, credit cards, and lines of credit. They also support local nonprofits through grants and sponsorships, demonstrating their commitment to community well-being.

Vermont State Employees Credit Union (VSECU)

This credit union offers a variety of products for nonprofits, including loans, deposit accounts, and investment services. Their dedication to supporting organizations that contribute to the well-being of Vermont communities makes them a valuable partner for local nonprofits.

How to Choose a Credit Union for Your Nonprofit

Choosing a credit union for your nonprofit organization involves careful consideration and strategic decision-making. Here are some tips to guide you:

  • Understand your nonprofit’s financial needs: Begin by assessing your organization’s financial requirements. Consider factors such as the volume of transactions, the need for loans or lines of credit, electronic banking services, and any specialized financial services your nonprofit might require.
  • Research credit unions: Look for credit unions that serve nonprofits and have experience working with organizations in your sector. Start by searching online, asking for recommendations from other nonprofits in your community, or contacting local nonprofit associations for suggestions.
  • Evaluate eligibility and membership requirements: Credit unions have membership criteria that must be met to become a member. Determine if your nonprofit is eligible for membership based on factors such as geographic location, industry, or specific membership requirements set by the credit union. Ensure that your nonprofit meets the criteria for membership before proceeding with the evaluation.
  • Review products and services: Examine the credit union’s range of products and services. Consider your nonprofit’s specific needs and ensure that the credit union provides services such as checking accounts, savings accounts, online banking, mobile banking, credit cards, and any specialized services required by your organization.
  • Consider loan and credit options: If your nonprofit anticipates the need for loans or lines of credit in the future, assess the credit union’s lending policies. Look into the types of loans offered, interest rates, repayment terms, and the credit union’s history of lending to nonprofits. A credit union with experience in nonprofit borrowing can benefit your organization’s financial needs.
  • Examine technology and online banking capabilities: In today’s digital age, it’s crucial to have access to convenient online banking services. Evaluate the credit union’s technological capabilities, including online banking platforms, mobile apps, and electronic fund transfer options. Ensure their technology aligns with your nonprofit’s requirements and promotes efficient financial management. 

Need a Financial Assistant for Your Nonprofit?

Lack of funding is one of the major factors constraining nonprofits’ operations. Unlike for-profit businesses, many financial institutions are uncomfortable advancing loans to nonprofit organizations because nonprofits are overly concerned with deepening their mission instead of profit-making. Hence, lenders see loan offers to nonprofits as a high-risk undertaking. 

At Financing Solutions, we understand the unique financial challenges nonprofit organizations face. That’s why we offer tailored lines of credit specifically for your needs. Our flexible lines of credit provide your nonprofit with the financial freedom to further its mission, expand its programs, and make a lasting impact on the communities you serve.

Whether you need to cover operational expenses, invest in new programs, or access funds when your cash flow is temporarily down, our lines of credit are here to support and serve as a cash backup plan.