The non-profit organization offers easy loans to small businesses to meet their business and funding needs that they can’t fulfill through the banking services or are unable to access. The non-profit loans are emerging as a great help to small businesses in times of need.
Traditional loans can take time and require a good credit score along with other requirements, which can be hard for some people. Non-profit loans have emerged as a great solution for small businesses, and today, many are turning towards them.
In the US, you will have so many options available for non-profit loans for small businesses. However, with so many choices, it can be a daunting task to find the best program, so we have found the best non-profit small business loan programs.
What are the best nonprofit small business loan programs?
If you are looking for small business loan programs, you should know that there are many federal and private companies offering loans to small businesses. Here we have listed some of the major loan programs available:
- SBA MicroLoans:
- The Small Business Administration offers funding up to $50,000 through SMA funding to intermediaries.
- The SBA offers funding to non-profit, community-based intermediary lenders who offer loans to small businesses to grow well.
- The lenders then offer loans up to $13,000, which is best for businesses that need funding of less than $50,000.
- You can find the SBA-approved lenders, where they typically set the range of interest between 8% to 13%
- Community Development Financial Institutions:
- Some Community Development Financial Institutions offer non-profit loans to small businesses.
- CDFIs are certified by the US Department of the Treasury as they provide funding for community development projects, such as affordable housing, small business loans, personal loans, etc.
- SBA-backed loans:
- The SBA also offers loans to small businesses to help them get the funding and mitigate the lender risks.
- Though SBA-backed loans are not fully non-profit loans, they are generally offered through non-profit lenders to businesses.
- You can find 504 loans or 7 (a) loans for your business from the Certified Development companies or SBA 7 (a) lenders.
What are the best independent non-profit organizations for small business loans?
You can find the best independent non-profit lenders offering loans to small businesses in the US in the list below:
- Kiva:
- Kiva offers small business loans to eligible businesses and helps people start their own businesses.
- The organization offers crowdfunded microloans to entrepreneurs who wish to bring a change.
- Small businesses that need loans up to $15,000 or higher can check the Kiva platform and apply for the loans with no credit requirement of credit score, no fee, and others.
- Accion Opportunity Fund:
- Accion Opportunity Fund is another non-profit lender supporting small businesses to help them with the capital and begin something of their own.
- The organization also offers educational resources, support for the business, and access to networks that not only help with your money but also help in taking your business to great heights.
- LiftFund:
- Just like its name, Liftfund offers funds that can lift startups, small businesses, and entrepreneurs.
- Within three simple steps, you can apply for the loan and get the support you need for your business.
- Till now, they have helped around 30,000 small businesses, resulting in job creation, economic growth, and community development.
- Self-Help Federal Credit Union:
- It is a great source of capital for small businesses and startups that do not focus on high profit; they look into the social impact of the business.
- The union has offered 4400 loans of around $1.1 billion to the businesses and is supporting them.
How to choose the best non-profit small business program?
When you are looking for non-profit small business loans, you should keep the following things in mind to effective decision:
- Know what you need: First, you should know what your business needs and how you will use the funds, so that the funds are used properly.
- Check the non-profit lenders and their mission: You should check the non-profit lenders’ policies and features thoroughly, and their mission to understand if it aligns with your needs.
- Go for the right program: You should check the small business loans and their terms under the program to check whether it fits with your needs.
- Compare the loan features: You should check the loan features from approval to repayment.
- Check testimonials or reviews: Before you decide from where to take loans, you should check its testimonials and reviews, or read the case studies to see how it helps the small business.
What are the risks with non-profit small business loans?
The non-profit loan helps in many ways, but there are also some risks involved that you can’t miss to check out, such as:
- The loans are available in limited and small amounts that may not fit with your long-term growth strategy.
- The repayment terms of the non-profit business loans sometimes have short repayment terms; however, some offer long tenure for repayment as well.
- Interest Rates: Generally, the non-profit organizations set the rates themselves, though they will not be over the government-set rates; they can be higher for some people.
- Limitation on use: The non-profit small business loans come with spending restrictions, as some are offered with special purposes, such as inventory, equipment, etc. So, you cannot use the loan money for anything else.
Non-profit lenders are supporting small businesses, boosting the economic growth of the nation. Businesses can take advantage of such programs and use them to their advantage.
