With more than 25 years of banking experience and an equal tenure serving the Portland, Ore., community with Catholic Charities, Impact NW and other organizations, Kathy shares this advice for how to help your banker to give your organization as much credit as possible.
In the past, nonprofits tended to be asset rich with limited need for credit. Times have changed, however, now that constrained governmental funding, and lower charitable contributions are continuing for the foreseeable future. No banker wants to be the bad guy or to say no to an organization that is doing good work in the community, but a nonprofit borrower that starts to struggle can fall quickly from an acceptable risk to an unacceptable risk, threatening the viability of the organization and the essential services they are providing to the community.
This article seeks to provide several ideas for how a nonprofit can address the impact of these trends in order to help a bank to assist this transitional period through providing credit lines or term loans. The suggestions and the bank's perspective on financial performance can be grouped under the two distinct concepts: conservative financial management and institutional agility.