Borrowing Funds

Choosing to borrow funds is one tactic that astute and innovative nonprofit leaders and boards use to achieve their organizational goals. When used strategically, loans and lines of credit can empower nonprofit leaders to realize their vision.

Using these financial management tools wisely requires careful thought and planning.

Loans and lines of credit are not appropriate for all nonprofits or circumstances. It is important to understand your organization’s history and current financial situation to determine whether or not you are in a good position to borrow funds. Although our Loan Officers can offer insight and guidance into your financial situation, you are the expert on your nonprofit.

Things to Consider

When you are considering borrowing funds, you should address the following things:

  • Do you know how the funds will be used?
  • Do you have a recent cash flow projection?
  • Do you have a realistic plan for repayment – one that is based on reasonable assumptions for future revenue and includes collateral to secure the loan?
  • Do you have the support of the board of directors?

Next steps

Taking the Next Step

If you have answered yes to these questions, the next step is to contact Nonprofits Assistance Fund. Our staff will walk you through the application process and help you figure out what kind of financing best meets your particular needs.

Visit How to Apply for a step by step guide to the process.

Stepping Back

If you do not know the answers to these questions, it is probably not a good time for you to borrow funds.

Other seasons to step back include:

  • You do not have a realistic idea of when or how the loan can be repaid.
  • If your organization has been operating with a persistent deficit.
Nonprofits Assistance Fund can provide financial counsel to help you figure out the situation and identify the best strategy for your organization.  Contact us for a Needs Assessment.

More information