Much of what has been discussed so far during the series of posts titled “Navigating the World of Nonprofit Loans” has revolved around the financials of a nonprofit and the ratios these financials translate into.
During late-stage vetting by lenders, though, emphasis turns to areas that many nonprofits don’t consider. This post shares several of these less financially centric areas that nonprofits should be aware of and thinking about.
The reason lenders pay attention to these areas are because they have proven to have bearing on the long-term financial health of organizations.
While this list is not exhaustive, it's encouraged that nonprofits thoughtfully analyze the following areas to position itself for greatest long-term success:
Leadership/Board – Those that are in leadership of nonprofits (volunteer and paid) are tasked with steering the organization in the right direction. Too often the board is made up of those passionate about the mission but, unfortunately, don’t have the necessary diverse backgrounds and professional experiences that can help the organization make strategic decisions. Many great white papers have been written to help nonprofits in comprising strong, well-rounded, boards.
Liability Management – Recent changes that can have material impact on a nonprofit is a sign of instability (especially leadership changes). Lenders don’t like seeing instability. Further, as it relates to key leadership, it is necessary to have a clear secession plan in place to navigate these possible events.
Real Estate Related –If you don’t already own and are looking at purchasing, one way to positively improve bank perception is to consider securing property that has multiple uses (not special-use) and/or can generate rental income.Now more than ever, having a trusted advisor that can help counsel nonprofits on its options as well as assist in gathering the necessary information and succinctly communicating with lenders to best position the organization is vital.
Semble has proven to be that trusted advisor for many nonprofits. We are an expert financial services provider focused on helping secure necessary loan funds at the lowest possible cost. To learn more about the services we provide, call one of our representatives at 877-973-6253.
To see the financial impact Semble can have, try out our free online loan calculate by clicking here.
Todd Tarbert is CEO of Semble, a trusted non-profit advisor. To learn more about its services, you can call a representative at 877-973-6253. To see the financial impact Semble can have, try out its free online loan calculate by clicking here.