Running a nonprofit doesn’t mean you don’t need funding. Whether you’re expanding programs, hiring staff, or upgrading technology, access to capital is crucial — and often challenging. Traditional banks may see nonprofits as risky borrowers, but the truth is: there are several funding options designed specifically for nonprofit organizations.
This guide explains how small business loans for nonprofits work, what programs are available in 2025, and how to choose the best option to support your mission.
Yes — many nonprofits can qualify for business loans. While most business loans target for-profit companies, lenders and government programs increasingly recognize nonprofits as vital community and economic contributors.
However, because nonprofits don’t generate profits in the traditional sense, loan approvals are based more on:
Cash flow from donations or grants
Operational stability and history
Leadership and governance structure
Collateral or guarantees
That means even without “profits,” you can still get financing — especially if you can show consistent revenue and responsible financial management.
Let’s explore the top ways nonprofits can access capital this year.
1. SBA Community Advantage Loans
The SBA Community Advantage (CA) Program is designed to help mission-based organizations — including nonprofits — access affordable funding.
Loan amount: Up to $350,000
Terms: Up to 10 years
Interest rate: Prime + 6% or less
Lenders: Community-based financial institutions (CDFIs, CDCs)
Pros: Flexible credit requirements and mentorship support
Cons: May require a personal guarantee from leadership
Best for: Nonprofits focused on economic development, job creation, or social entrepreneurship.
2. Community Development Financial Institutions (CDFIs)
CDFIs are specialized nonprofit lenders that provide funding to underserved communities and organizations. They understand nonprofit structures and often offer below-market interest rates and technical assistance.
Loan amount: $10,000–$500,000
Interest rate: Typically 5%–10%
Terms: Up to 10 years
Pros: Mission-aligned, flexible underwriting, and support services
Cons: May take longer to process applications
Examples:
Nonprofit Finance Fund (NFF) – specializes in community-impact organizations
Community Reinvestment Fund (CRF) – offers loans and capacity-building resources
Accion Opportunity Fund – supports nonprofits and microenterprises
Best for: Nonprofits serving low-income or underrepresented communities.
3. Nonprofit Loan Funds and Credit Unions
Many nonprofit-focused financial institutions — including regional loan funds and community credit unions — offer customized financing programs.
Examples:
Calvert Impact Capital: Offers flexible financing for mission-driven organizations
Local Initiatives Support Corporation (LISC): Provides loans for community projects
Inclusiv Credit Unions: Focus on equitable lending for nonprofits and small businesses
These lenders often evaluate impact potential and community benefit alongside financials, making them more accessible to nonprofits than banks.
4. SBA Microloans
Through its Microloan Program, the SBA partners with nonprofit intermediaries to provide loans up to $50,000 for small organizations — including qualified nonprofits.
Loan amount: Up to $50,000
Terms: Up to 6 years
Interest rate: 8%–13%
Use of funds: Working capital, supplies, furniture, or equipment
Pros: Easy qualification and mentorship included
Cons: Not ideal for large projects or real estate
Best for: Early-stage nonprofits needing seed capital or operational support.
5. Bank and Credit Union Loans
Some mission-aligned banks and community credit unions offer business loans to well-established nonprofits with stable funding streams.
Examples include:
Amalgamated Bank – sustainable and social-impact lending
PNC Community Development Banking
Wells Fargo Diverse Community Capital Program
Requirements:
At least two years of operating history
Reliable grant or contract income
Strong leadership and financial documentation
Best for: Mature nonprofits with recurring funding or government contracts.
6. Equipment or Vehicle Financing
If your nonprofit needs to purchase vans, medical equipment, or technology systems, equipment financing can help you spread out costs over time.
Loan amount: Based on equipment value
Terms: 3–10 years
Collateral: The equipment itself
Pros: Easier approval, fixed payments, ownership after repayment
Cons: Limited to equipment-related expenses
Best for: Health clinics, food banks, shelters, and educational programs.
7. Lines of Credit
A nonprofit line of credit gives flexible access to capital for managing cash flow, covering grant delays, or handling seasonal funding gaps.
Loan amount: $10,000–$250,000+
Terms: Revolving (borrow, repay, reuse)
Interest: Pay only on what you borrow
Pros: Great for short-term expenses or emergencies
Cons: Higher rates if balances carry long-term
Best for: Nonprofits with predictable funding cycles but occasional cash flow gaps.
While requirements vary, most lenders look for:
2+ years of operational history
Consistent income sources (grants, donations, contracts)
Strong organizational governance
Clean financial records
Proof of community impact
Some lenders also request personal guarantees from nonprofit directors or board members — though this depends on the loan type and institution.
Gather financial documents (bank statements, tax returns, Form 990)
Prepare a cash flow forecast and funding plan
Identify mission-aligned lenders or CDFIs
Apply with clear use-of-funds documentation
Review loan terms and repayment conditions carefully
Strengthen your financial reporting: Lenders value transparency and organization.
Show diversified funding: Combine grants, donations, and earned revenue.
Develop a repayment strategy: Demonstrate consistent cash inflows to cover debt.
Highlight your impact: CDFIs and mission-driven lenders prioritize measurable community benefits.
Build relationships locally: Partnering with local banks or SBDCs increases credibility.
If traditional loans aren’t accessible, consider:
Program-Related Investments (PRIs): Low-interest loans from foundations
Grants: Federal, state, or private foundation grants for specific programs
Crowdfunding: Raise funds online through platforms like GoFundMe or GlobalGiving
Impact investors: Social investors seeking community returns alongside financial ones
Corporate partnerships: Access funding through sponsorships or joint initiatives
❌ Applying without a repayment plan – lenders need to see sustainability
❌ Overborrowing – only take what your cash flow can support
❌ Ignoring restricted vs. unrestricted funding – ensure loan funds align with unrestricted revenue
❌ Relying on one source – diversify funding to minimize risk
Accessing small business loans as a nonprofit may take extra effort — but it’s far from impossible. Between SBA programs, CDFIs, credit unions, and impact lenders, there are numerous ways to secure affordable capital while staying true to your mission.
With the right financial planning and partnerships, you can use business loans not just to sustain your operations — but to expand your impact and build a stronger future for your organization and community.