501c (3) Cash Flow
Poor
501c (3)[1]
is a non-profit that provides tutoring services (i.e. reading and math) to at
risk students throughout South and Central Florida. 501c (3) has a team of
teachers, which facilitate their services to the said students. This non-profit
receives funding for their services through grants they are awarded from local
and state governments, as well as other charitable organizations. 501c (3) has
been recognized by civic groups for their work throughout the community.
Challenge:
501 approached me, in regards to their current cash flow
situation. They found themselves cash poor to run their current tutoring
project. The reason being is twofold; one, donations have dropped
significantly, due to the current economic climate. Secondly, their new grant
required them to front all upfront cost, during the first three months of
project ramp up. Typically, grants fund a percentage of the awarded amount to
the non-profit to facilitate expenditures associated with the ramp up of the
project. In this case, all expenses
would be assumed by the non-profit, then at months end the organization submits
reimbursements to the grant administrator. After the reimbursements are
submitted for the past month, the grant administrator has up to 30 days to pay
the reimbursements. This scenario plays out month-to-month for the duration of
the grant, which is for one year.
Solution:
FT Trade Financial Corp.
(FTT) a commercial lender, who specializes in accounts receivable financing
(factoring) approved a Factoring facility in the amount of $150,000. This
financing vehicle was used, because it would provide the immediate injection of
cash needed to meet their high payroll demands. Since getting funding from FTT,
501has been able to meet their cash flow demands and continue to provide their
much need service to their community.
If you would like more information on this case, please do
not hesitate to contact me at 305.469.9527.
[1]
The official name of the 501c3 is not referenced to protect our client’s
privacy.
