What to look for when lending to a nonprofit entity

Description

Abstract: Lenders interested in providing debt financing to the nonprofit sector must develop the means to evaluate the creditworthiness of an organization that doesn’t make profit its primary goal. This article lists some factors that can help a lender gauge whether a nonprofit presents a prudent risk, such as whether the nonprofit is successful in fulfilling its mission and what its goals and metrics are. The article points out that nonprofits can be viable borrower prospects — if a lender is willing to invest the time to review an application and support the nonprofit’s mission.