3 Keys to Commercial Real Estate Loans for Non-Profits

May 16, 2022

Non-profit organizations along the Texas Gulf Coast enrich and strengthen our local communities, but many need access to tools and financial resources in order to continue providing their needed services and programs.

Commercial real estate loans for non-profits are an ideal solution for your organization to expand services or have a fixed location within your community.

Learn more about the three keys to commercial real estate loans working with Texas Gulf Bank and how we can create a positive relationship with your organization to support your growth needs.

1. Discover The Benefits of Commercial Real Estate Loans

Commercial real estate loans offer several important benefits to the non-profit community in Texas.

– Permanence. Non-profits usually start by renting a property until they become more established. It’s vitally important for your non-profit organization to eventually make the transition from renter to owner so you have a permanent, stable location to achieve goals and fulfill your mission to the community.

Commercial real estate loans allow your non-profit to purchase an existing building or to purchase land and construct your own facility from the ground up. Your organization should look for a property that is in a place that allows you to best serve the local community and is strategically located near key streets or neighborhoods.

– Room for growth. Some non-profit organizations experience tremendous growth and need a larger facility to meet their needs. Commercial real estate loans allow your group to have expanded warehouse, storage, office, or meeting space capabilities to better serve the area and nearby residents.

– Financial stability. Non-profit groups that lease a space may face unexpected rent increases or maintenance costs that negatively impact their annual budget. With commercial real estate loans, your non-profit has the option of fixed interest rates and affordable loan amounts to help stabilize your cash flow.

– Strengthened reputation. Commercial real estate loans also allow non-profit groups to strengthen their reputation among donors, financial institutions, and the community at large. Having a permanent physical location demonstrates the long-term sustainability of your non-profit and the positive impact it has within the community. 

– Freedom to dream big. Landlords can sometimes impose building or parking restrictions on tenants, forcing non-profits to limit the scope of their services or serve just a limited portion of the community. Commercial real estate loans offer your non-profit the freedom and opportunity to dream big and serve more people in bold and impactful ways. 

The benefits offered by commercial real estate loans allow your non-profit to expand and achieve long-term growth without sacrificing services or programs. 

2. Understand the Loan Process

Non-profit groups understand the importance and process of effective fundraising, but you might be unfamiliar with the commercial real estate process.

At Texas Gulf Bank, our loan application process is simplified for your benefit. We start with gaining an understanding of several facets of your non-profit organization, including all relevant financial details, then actively seek out ways that we can provide you with access to financial resources that fit your needs.

– Non-profit history. Items we consider include how long your non-profit has been established, the services and programs offered, and how funding is received. Establishing credibility about why you have been successful and how you plan to remain successful are core tenants to our lending to any business or organization.

– Financial sources. Since most non-profit loans are not personally guaranteed by an individual, our bank also examines the consistency and risk level of your organization’s funding sources.

Examples include whether or not your organization’s annual budget is funded by one large donor versus many small donors, private donations versus government grants, and subsidies versus hosting large events.

– Organizational structure. We want to examine the governance of your organization. We need to know how the Board of Directors is composed, the organizational structure, if there are proper controls in place to protect the organization and finances, and any government or legal obligations required.

– Financial records. Additionally, we want to evaluate your financial records. Since non-profits typically use fund accounting to track excess revenue over expenditures, which is different from for-profit companies that track net income, we will want to thoroughly assess your financial position.

Your non-profit fund accounting should reflect the financial prudence of the organization, demonstrating an understanding of how to stay within budgets and maintain sufficient reserves for additional campaigns or unforeseen circumstances. 

– Documents. As part of the loan application process, we require the following documents and records to support your application.  These include but are not limited to:

  • Three most current filed years of Tax returns.
  • Three most current years of Financial Statements for your non-profit.
  • Information regarding existing debts and loan agreements.
  • Projections for future revenue and expenses.

We will also need to know of any existing lines of credit and current working capital totals to help evaluate your loan eligibility.

3. How Texas Gulf Bank Can Help Your Organization

Our goal as a community bank is to provide financial services directly to the communities where we work and live along the Texas Gulf Coast. We strive to make a difference by helping non-profit organizations achieve their mission statements.

Applying for a commercial real estate loan through Texas Gulf Bank can help your non-profit reach new goals and serve a wider portion of the local community.

Our team of skilled bankers can guide your non-profit through each step of the loan process to ensure a smooth banking experience. We offer exceptional customer service and have proudly served the Gulf Coast community for over 100 years. Plus, our team aims to ensure future growth for our customers. We pursue relationships, not transactions.

To learn more about commercial real estate loans for non-profits or our other wide range of banking solutions for business customers, sign up for our Texas Gulf Bank email newsletter to receive more information directly to your inbox. Or, if you’re ready to apply for funding, utilize our contact form below to connect with our team!

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