Financing Solutions reached its 1,000th customer for its nonprofit line of credit program. The new program represents a whole new way of doing business for the nonprofit world.
Nonprofits are share many of the same qualities of a for-profit business, with revenue coming in and expenses going out, leaders and employees, products, services, customers and a mission. However, the financial tools accessible to for-profit businesses often haven’t been available for nonprofit organizations, and one of the most important tools is a business line of credit.
In 2016, in response to this need, Financing Solutions designed a line of credit program specifically designed for nonprofits.
Managing Partner Stephen Halasnik commented, “We had a few nonprofit customers in 2015 that told us how hard it was for them to get a line of credit from a commercial bank. What we did was design our line of credit program to take down those barriers, so nonprofits could easily qualify for our line of credit program. Among the barriers that we eliminated was the need for collateral, no personal guarantees (except in the instance of fraud), and zero costs until the line is actually used.”
Qualifying nonprofits must have at least $300,000 in yearly revenue and the person signing the contract – executive director, officer or board member – must have a 650 or greater credit score.
Financing Solutions is one of the largest financing companies to provide a nonprofit line of credit.
“Nonprofits make the best clients because 99% of these organizations use their line wisely meaning they will not default,” added Halasnik. “Many will not use their line unless they know that the funds are coming in. Our line of credit really is based on trust and is something commercial banks cannot offer because banks must adhere to a strict criteria.”