Guide to Business Loans for Nonprofit Organizations
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Key Points
Nonprofit business loans are similar to for-profit business loans. To qualify for any business loan, you’ll need to meet the lender’s requirements, regardless of whether your business is for-profit or not-for-profit. Nonprofit loans are often viewed as risky to the lender. Because of this, you may have to meet a certain credit requirement and/or put up collateral to secure the loan. Funding options for nonprofits include loans, grants, corporate giving programs, crowdfunding sites, and more. Nonprofit organizations can also apply for small business lines of credit and business credit cards when in need of funds.
What Are Nonprofit Business Loans?
How Do Nonprofit Business Loans Work?
Pros and Cons of Using Loans for Nonprofit Organizations
Why Are Nonprofit Business Loans Difficult to Obtain?
Strict Requirements
Risky Investment
Collateral Is Often Required
Typical Funding Options for Nonprofit Businesses
SBA Loans and Grants
Nonprofit Loan Funds
Nonprofit Grants
CDFIs
Corporate Giving Programs
Crowdfunding Sites
Applying for Nonprofit Business Loans
Your organization’s fundraising case statement Proof of 501(c)(3) (nonprofit/tax-exempt) status Recent tax returns Recent bank statements Other financial documents (e.g., income reports, cash flow projections) Proof of collateral
Alternative Funding Options for Nonprofits
Online Loans
Banks or Credit Unions
Business Credit Card
Business Line of Credit
Nonprofit Lenders
What Nonprofit Lenders Are
How Nonprofit Lenders Work
Pros and Cons
How to Find Nonprofit Lenders
The Takeaway
Frequently Asked Questions
About the Author
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