A Tucson-based nonprofit loan fund recently awarded its first three loans for local nonprofit organizations hoping to fill funding gaps.
The Nonprofit Loan Fund of Tucson and Southern Arizona was created a few years ago with the goal to help fund nonprofits that have have a difficult time qualifying for bank loans, or that at times have funding gaps and need the additional income, said Helaine Levy, board member of the Nonprofit Loan Fund of Tucson and Southern Arizona.
The fund emerged about two years ago, but it was two months ago that it was finally able to give out its first three loans, Levy said.
"(It was) Jim Click who convened a group of people comprised from the finance community, nonprofit community, business community to come together and think about putting together a loan fund for the nonprofit community, for those nonprofits that typically have a tough time getting conventional financing loans from our banks," she said.
Wingspan - a local community center for lesbian, gay, bisexual and transgender people - received one of these loans, and the $35,000 is going toward supporting the various programs it provides, such as a homeless youth project and an anti-violence program, said Carol Grimsby, executive director of Wingspan.
"We are using it as a (financial) bridge, and the Nonprofit Loan Fund made it an easy access for us," Grimsby said.
She said most of Wingspan's money comes from grant funding but the funds typically replenish money the organization has already spent on operating costs.
The Nonprofit Loan Fund contributions are paid back within one year, Levy said, which enables the fund to offer another cycle of loans.
"When that money is paid back then we have the same amount of money to re-loan into the community," Levy said.
For instance, if a nonprofit comes into the fund requesting $10,000 in grant money, "I have a conversation with them, and find out that a...short-term loan can serve the same purpose for them (but) that $10,000 doesn't just go out once in the form of a grant, but it keeps recycling in the community, from one nonprofit to the other," Levy explained.
The fund's goal is to raise $1 million to maintain its loans, which range from $10,000 to $50,000, in a yearly basis, she said.