Representative example: Carter and Gianna open a food bank<\/h4>
Carter and Gianna are a retired couple who want to put their time and energy into something that will benefit the local community. They decide to open a food bank using a portion of their savings and a grant they were fortunate enough to receive from the government. However, they\u2019re still short about $50,000.00 of the money needed to get the food bank up and running.<\/p>
Carter and Gianna apply for a nonprofit loan and are approved, thanks to their strong credit scores and solid business plan. Because the loan is for a nonprofit enterprise, they are offered a very competitive interest rate and repayment terms that are specially tailored to their organization\u2019s needs.<\/p>
Cost of opening a food bank<\/strong><\/td>| $200,000.00<\/td><\/tr> | Loan type<\/strong><\/td>| Business loan (term loan)<\/td><\/tr> | Loan amount<\/strong><\/td>| $50,000.00<\/td><\/tr> | Interest rate (APR)<\/strong><\/td>| 7.40%<\/td><\/tr> | Loan term<\/strong><\/td>| 5 years<\/td><\/tr> | Additional fees<\/strong><\/td>- Origination fee of 3.00% ($1,500.00)<\/li>
- Application fee of $0 (waived by lender)<\/li><\/ul><\/td><\/tr>
Monthly payment<\/strong><\/td>| $999.52<\/td><\/tr> | Total loan cost<\/strong><\/td>| $59,971.20<\/td><\/tr><\/tbody><\/table> *The information in this example, including rates, fees and terms, is provided as a representative transaction. The actual cost of the product may vary depending on the retailer, the product specs and other factors.<\/small><\/p><\/div><\/article>What will I need to apply?<\/h3> What you need to apply for nonprofit financing varies by lender. You might be asked to supply some or all of the following documents when your nonprofit applies for a loan:<\/p> - Financial statements.<\/strong> A financial statement gives your lender an idea of your nonprofit\u2019s cash flow and net worth.<\/li>
- Bank statements.<\/strong> Bank statements also show how much money regularly comes in and goes out, and can give your lender a picture of how much you\u2019ll be able to afford in monthly repayments.<\/li>
- Nonprofit bylaws.<\/strong> Your lender might ask to see your bylaws to get a better understanding of the financial model you\u2019re following to find a type of financing that fits your situation.<\/li>
- Board resolution.<\/strong> This gives your lender information on your nonprofit\u2019s board of directors and an understanding of the financial decisions it\u2019s made in the past.<\/li><\/ul>
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