November 3, 2010; Source: Atlanta Journal-Constitution | If you think commercial credit is tight, imagine how hard it is for nonprofits to secure financing. Thankfully the Community Foundation in Atlanta is coming through for organizations that need to borrow money, especially those facing a cash crunch as they wait for reimbursement from government agencies.

The foundation recently launched the Nonprofit Loan Fund to assist nonprofits whose annual operating budgets are under $3 million. The program is based on an earlier and successful Arts Loan Fund that the Atlanta Journal-Constitution reports made 16 loans to small arts organizations. Fifteen of the loans were repaid and the sixteenth restructured.

The Community Foundation of Atlanta knows its market well. Some 82 percent of all nonprofits in Georgia have annual operating revenue of less than $1 million a year. In addition, based on research the foundation did before setting up the fund, half of the nonprofits surveyed reported that they had cash shortfalls in 2009. More than 80 percent of these groups described their problems as temporary.

For example, a group in Atlanta that works with low-income and homeless people with HIV/AIDS needed $39,000 to carry the organization until the city processed its reimbursement. After failing to find any commercial lender, the Living Room turned to the Nonprofit Loan Fund for help. “It wasn’t a huge loan,” said Dolph Ward Goldenburg, executive director. “But sometimes it doesn’t take a whole lot of money to really keep you going.”—Bruce Trachtenberg