You're looking for funding for your business. There are so many different avenues for getting a loan, where do you start? Knowing the difference between a for-profit and a nonprofit lender will help you as you shop around.

You’re looking for funding for your business. There are so many different avenues for getting a loan, where do you start? Knowing the difference between a for-profit and a nonprofit lender will help you as you shop around.

What is the difference between For-Profit and Nonprofit?

The most technical difference is the way an organization is categorized and taxed. A nonprofit is typically a 501(c)3 organization, which means they have certain tax exemptions because they are serving the public without making profit beyond operating costs. Many nonprofits are volunteer-run.

There are other key differences such as leadership structure and the way they are funded, but the most relevant differences to you as a borrower are their purpose and their qualifications for getting a loan.

Their purpose

For-profit lenders’ purpose is very clear: to make a profit. This includes traditional banks as well as predatory “alternative” lenders. This purpose drives the goals and motivations of the employees and affects who is able to get a loan from them. Because a for-profit lender needs to make money, they are less likely to lend to small businesses they deem to be more of a risk.

Nonprofit lenders include credit unions and microlenders like Opportunity Fund. A common misconception is that nonprofits are charities, because they are driven by more than making money. Nonprofit lenders are community-oriented and support initiatives that focus on improving the lives of small business owners. This means that Opportunity Fund, a nonprofit lender, is more likely to lend to “risky” businesses that others often won’t touch, such as new businesses, recent immigrants, restaurants, food trucks, micro businesses, and those with poor or no credit.

Qualifications for getting a loan

Things we hear a lot from our clients is that banks won’t help them because they have financial history that doesn’t look great on paper. This could be for a variety of reasons, but the message is clear: for-profit lenders care the most about numbers. In addition to requirements that most lenders ask for, they can be more strict about FICO scores and credit reports.

Opportunity Fund takes the time to listen to you and understand you as an individual with unique business needs. Some Opportunity Fund loans don’t have minimum FICO score requirements, and having little or no credit history may be accepted.

The trade-off with a nonprofit lender who takes on “risky” businesses is you may pay a higher interest rate to cover the greater potential loss. That being said, always look for a trustworthy lender who is truly affordable and transparent about what their loans actually cost.

Find a responsible lender

While not every for-profit lender is trying to suck your bank account dry, there are many “alternative lenders” out there that use dangerous and predatory practices that you should avoid – such as Merchant Cash Advances (MCAs) and Confessions of Judgement (CoJ).

Opportunity Fund is a co-founder and signatory of the Small Business Borrower’s Bill of Rights, which aims to educate small business owners about responsible business lending. Your rights, not protected by law but important for you to understand and fight for, include:

  1. The Right to Transparent Pricing and Terms
  2. The Right to Non-Abusive Products
  3. The Right to Responsible Underwriting
  4. The Right to Fair Treatment from Brokers
  5. The Right to Inclusive Credit Access
  6. The Right to Fair Collection Practices

 

For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or loans@opportunityfund.org.  For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or sbhelp@opportunityfund.org.

Loans are subject to credit review. Additional documentation may be required for credit approval. We are an Equal Opportunity Lender. Loans will be made or arranged pursuant to California Department of Corporations Finance Lenders License #6050609.

Opportunity Fund is tackling economic inequality so that hard work and perseverance means a shot at getting ahead, not just struggling to get by. Our programs are supported by a community of donors and investors whose contributions help to fund small businesses, support college students, and build stronger families and vibrant neighborhoods. Since 1994, the team has deployed $700 million and helped thousands of families earn, save and invest in their own futures. Opportunity Fund has earned a 4-star rating from Charity Navigator, America’s largest independent charity evaluator, for our commitment to accountability and transparency.

Visit us online at http://opportunityfundloan.org and follow us on Facebook and Twitter

Business giants are making big headlines voicing their support for the LGBTQ community. Why? Read to find out and learn how you can help with your small business.

Business giants are making big headlines voicing their support for the LGBTQ community. Why? Read to find out and learn how you can help with your small business.

 

Business giants are making big headlines voicing their support for the Lesbian, Gay, Bisexual, Transgender, and Queer (LGBTQ) community. From American Express to IKEA, the business world seems to be opening its doors to inclusivity and equality. Why? Because being inclusive is better for your business. In fact, 64% of Americans would be more likely to buy from a company who supports LGBTQ individuals.

Not only will supporting this demographic benefit your bottom line, but it will boost productivity of your employees and attract top talent who cares about their employer’s mission. Employees who leave positive reviews about working for your business may mention your inclusion to others who will spread the word. Organic, word-of-mouth advertising is still the best way to grow your small business.

Easy Ideas To Support The LGBTQ Community

As a small business, you don’t have millions of extra capital on fancy awareness campaigns. Here are a few realistic ways you can celebrate diversity and support the LGBTQ community:

  1. Have a conversation with your employees. You shouldn’t expect anyone to come forward with their sexuality, but make sure you foster an open workplace where employees feel safe. Invest in tolerance training and check your bias when hiring.
  2. Do your research. It’s easier to stereotype, but it is more important to spend a little time learning about this demographic. Read about their experiences, discrimination, struggles, and passions. People are unique no matter what their sexual orientation, and you can best support them when you do your research.
  3. Hire and train managers who reflect your commitment. Having bad managers on your team will cost your business in reputation, employee satisfaction, worker productivity, and profits.
  4. Consider hanging up a small sign of your support. You can find lots of stickers, decals, and signs that you can post in your business – customers won’t think it is out of place next to your Yelp and Trip Advisor stickers.
  5. Check the diversity of your ads and marketing materials. Do you only show photos of heterosexual couples? Consider showing different types of families and couples for your promotional materials.
  6. Offer health insurance to your full time employees that covers gender reassignment surgery. As a small business, you may not have employees take advantage of this like big businesses do, but that you do will be noticed and appreciated.
  7. Support other LGBTQ businesses. Whether you’re looking for a new supplier or wholesaler, a community partner for a local event, or have personal shopping to do, consider looking specifically for LGBTQ-owned businesses.
  8. Donate profits to organizations that help the LGBTQ community. Your business doesn’t need to lose a large portion of revenue, but even choosing to donate a small percentage during Pride Month will go a long way towards showing your local community that you care.
  9. Sponsor an event. Check with local LGBTQ youth centers, non-profits, civil rights groups, and clubs for small events your business could sponsor.
  10. If your business has a single-stall restroom, make it gender neutral. Everyone just uses the “wrong” restroom when there’s a line anyways.

 

For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or loans@opportunityfund.org.  For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or sbhelp@opportunityfund.org.

Loans are subject to credit review. Additional documentation may be required for credit approval. We are an Equal Opportunity Lender. Loans will be made or arranged pursuant to California Department of Corporations Finance Lenders License #6050609.


Opportunity Fund is tackling economic inequality so that hard work and perseverance means a shot at getting ahead, not just struggling to get by. Our programs are supported by a community of donors and investors whose contributions help to fund small businesses, support college students, and build stronger families and vibrant neighborhoods. Since 1994, the team has deployed $600 million and helped 20,000 families earn, save and invest in their own futures. Opportunity Fund has earned a 4-star rating from Charity Navigator, America’s largest independent charity evaluator, for our commitment to accountability and transparency.

Visit us online at http://opportunityfundloan.org and follow us on Facebook and Twitter

The True Cost of Your Business Location

You’re looking for the right location for your business. Or you’re getting ready to move in. Or you’ve been there for a while and the costs are starting to add up. Here’s a list of things related to your business location that can drain your cash flow, and how to get back on track.

read more

Opportunity Fund. Working Capital for Working People. opportunityfund.org