Much of our work here at NFF focuses on easing nonprofits’ access to capital--both in sufficient quantities and the right kinds--for dealing with short- and long-term needs. Loans can be used to help meet such needs, but there are important distinctions between loans and other types of capital. What will a loan mean for your organization? How will you meet the terms of the loan once you’ve received one? With these questions in mind, NFF Associate Dana Britto assembled five introductory blog posts each providing a helpful tip that you should consider before applying for a loan. (Read all five tips here!)
many prospective borrowers may not understand from the outset is that we really want to lend money to
you. Once we’re convinced of your basic
fitness to take on debt, the next task is to advocate for your loan in front of
a lending committee. We become advocates
for your interests, and you never want your advocate to be surprised by some
relevant information you forgot to share.
we ask and the information we seek as lenders is required to ultimately protect
the potential borrower while ensuring our ability to lend. Throughout this process, developing and
maintaining the trust of your lender is crucial. With this in mind, it is in
your best interest to do all you can to provide information for your lender to
help generate confidence in your organization, specifically with regards to
your leadership team (including your board), financial health, fiscal and
programmatic controls/protocols and of course, your repayment sources. Attaining this information will only increase
a lender’s ability to effectively advocate on your behalf, which ultimately
increases your chances of securing a loan.
potential borrowers fail to recognize that withholding or falsifying information
can be extremely costly.