Alterna - Collaborative NFP Loan Fund

Loan Details
Loan Type	Line of Credit or Term Loan
Loan Amount	Between $1,000-$20,000 established organizations Up to $3000 for start-ups and organizations operating for less than 2 years.
Fees and Interest Rates	Prime + 4%
Repayment Term	Up to 3 years, with an option to pay the interest-only for up to 8 months

APPLICATION REQUIREMENTS

Financial statements and other essential supporting documents are required as part of the loan application. Please note that failure to submit ALL of the required documents listed will result in delays in processing your application. For the application package to be considered COMPLETE, you need to submit ALL of the following:

Completed Collaborative NFP Loan Application
24 month projected cash flow
1. 12-month during COVID-19 (while organizational operations were physically closed due to pandemic restrictions)
2. 12 months post COVID ( once organizational operations reopened to the public)
Annual Report (if available)
2 years audited financial statements or notice to reader,
1. or 2 years of operational activities (i.e. tracked revenues and expenses)
2. or 1 year of financial statements for start-ups or new non-profits/charities
For loans over 10K, organizations must provide 3 years of financial information.
2019 debt service ratio qualification. Organizations must be able to demonstrate through financial records that their business was negatively financially impacted by the public health measures put in place due to COVID-19
Letter from the organization's Board of Directors endorsing the loan application
3- year grant history if applicable
Complete interview questionnaire
Articles of Incorporation
Board resolution
Photo ID of signing authority (compliance with Alterna Savings Policies)

How can financing help not-for-profits and charitable organizations?

What is the difference between a Line of Credit and a Term Loan?

Operating Line of Credit

An operating line of credit (LOC) gives organizations access to funds within a set limit when and if they need them. LOC Interest rates are lower than most credit cards and some other credit solutions, and interest is only incurred on the funds taken out of the account. There is no fixed repayment schedule except for monthly fees and interest charges. The organization can pay down the LOC as their finances allow, and those funds can be reused as needed. A LOC's is most useful as a tool to smooth out an uneven cash cycle rather than to finance larger purchases. For example, a LOC could cover bill shortfalls (including payroll) in lean cash months.

Term Loans

A term loan is a set amount of money borrowed over a fixed period. The fixed period is called the term of the loan. Term loans are often used to finance large projects such as purchasing capital equipment, real estate, or fund renovations.

What do you mean by when you say "opportunity cost"?

Opportunity costs are the potential benefits businesses miss when choosing one alternative over another. Because opportunity costs are unseen, they can be easily overlooked. Understanding the potential missed opportunities when a business decides on one project or path over another allows for better decision-making. It is fundamental to perform a cost-benefit analysis of a project or undertaking before accepting or rejecting the idea. Rejecting an idea based solely on the cost of the project without taking into account the opportunity that the project represents can negatively impact your organization's growth. Looking at the opportunity cost of each choice can help you find the most valuable opportunities for the long-term health of your organization.

When is the director of an organization liable for the organization's financial obligations? What happens if an organization finds itself in a financial crisis, cannot meet its commitments, and is considering bankruptcy?

What does our organization need to have in place before considering financing?

FAQ's

What is the difference between a Line of Credit and a Term Loan?