Members of the Agua Gorda Cooperative of Long Prairie are benefitting from an Initiative Foundation business partnershp with the Latino Economic Development Center. Learn more ...
The Initiative Foundation's ambition is to help nonprofits
and their communities grow and thrive.
To create a resilient nonprofit sector, the Initiative Foundation provides up to $75,000 in financing to eligible organizations for the creation or expansion of mission-related social enterprise or earned-income ventures. Loan funds may be used for working capital, equipment acquisition and/or facility improvements that are clearly defined in a written business plan.
Loans are available to eligible nonprofit organizations of different sizes and fields of service including:
- Community development
- Human services
- Health care
- Arts and humanities
Nonprofit lending program guidelines
Any 501(c)(3) nonprofit organization in the Initiative Foundation’s 14-county service area is eligible to apply. The following guidelines apply for qualifying nonprofit organizations that are eligible for Initiative Foundation loans of up to $75,000.
- Financing Terms: The term/amortization, loan covenants, reporting and insurance requirements and other matters are determined on a case-by-case basis. Interest rates are fixed and generally range from 2 to 4 percent.
- Collateral and Guarantees: The collateral for a loan will generally consist of a security interest in all business assets or real estate of the borrower and may be in a first or second position. Guarantees will generally not be required; however, the organization’s board members may have a legal liability per state statute.
- Origination Fee: The borrower will pay a 1 percent origination fee plus other third-party expenses for documentation, recording, etc.
- Application Review: Lending decisions generally are made within five to 10 business days from the date the Initiative Foundation receives the application and all supporting materials.
Nonprofit borrower responsibilities
The borrower must meet the following responsibilities:
- Information Sharing: The borrower agrees to provide financial and other information to the Initiative Foundation from which the Foundation can make a credit determination.
- Employment Reports: The borrower agrees to complete an employment report at the inception of the loan plus annual employment surveys by Dec. 31 of each year for the term of the loan.
Financial Reports: The borrower agrees to comply with the Initiative Foundation’s request for financial statements and/or progress reports for the term of the loan.