LENDonate Uniting Nonprofits, Funders With New Hybrid Online Lending Platform
On June 22, LENDonate announced the launch of its hybrid online lending platform, which simultaneously sources donations and loans to 501(c)(3) nonprofit organizations. This platform is the first of its kind, bringing together nonprofits with funders—financial institutions, philanthropic organizations and accredited investors—for “quick funding of high-quality, low-cost loans,” according to the press release.
In an interview with NonProfit PRO, LENDonate’s founder and CEO, Vivienne Hsu, said that this innovative platform is a need for both nonprofits and potential lending donors.
“We are trying to create a comprehensive ecosystem that supports both funders and nonprofits, so they can connect in a more efficient and relational way, rather than a transactional way.” — Vivienne Hsu
Many people don’t realize how much in nonprofit loans is out there. While the U.S. credit card debt is at an estimated $779 billion, there is approximately $600 billion in nonprofit loans out there—$450 billion held by bank loans and the remaining amount held by others (e.g. foundations, CDFIs), Hsu said. With this in mind, Hsu aimed to take LENDonate beyond the zero percent interest rate and let lenders choose.
LENDonate streamlines this process by underwriting and structuring the loans in the marketplace, where funders can customize their financial support in forms of donations, loans or a combination of both.
According to Hsu, the loan minimum for taking advantage of LENDonate is $50,000—with no maximum. With the minimum, “that amount it is still ‘fundraiseable’ and is definitely attainable, even for smaller nonprofits. Beyond that, it gets a little trickier. It’s still doable, but it may stretch over time and once it does, it may or not be suitable for some situations.
Here’s how LENDonate works via the press release:
Financial institutions can grow and diversify community-driven lending. LENDonate helps banks, credit unions, CDFIs and foundations diversify by presenting a wide range of financially qualified borrowers, with a focus on high-quality loans.
Robust repayment process made easy and scalable. LENDonate facilitates co-lending of traditional and philanthropic lenders by uniquely blending different lender rates into one simple, aggregate borrowing rate. During repayment period, its one-of-a-kind process partitions a borrower’s repayment such that each lender receives repayment amounts based on their own lending rates.
Easy loan-to-donation conversion. In addition to return-oriented loans and pure donations, LENDonate’s unique loan-to-donation conversion feature allows lenders to manage their own planned giving or to financially reward borrowers for meeting desired milestones, by converting a portion of the loan into donation or grant anytime during the repayment period.
To learn more about how LENDonate, we reached out for a statement from Lisa Steindler, executive artistic director of Z Space, a nonprofit multidisciplinary arts organization, who had this to say about the organization’s experience with the hybrid platform:
"LENDonate helped us secure much more attractive financing at a seven to 10 percent savings on interest rate of our bank credit line. As a nonprofit, government grants and family foundations are integral to our financial footing. However, applying for these grants is a significant, long and arduous process, sometimes taking as long as eight months to one year for us to find out whether we’ve secured a grant. What’s exciting is the possibility through LENDonate—loans can also be converted into a donation.”
For more information about LENDonate, click here.