Nonprofits, Take Advantage Of The Nonprofit, Interest-Free, Micro Bridge Loan

February 3, 2023

Maryland Nonprofits

Nonprofit, Interest-Free, Micro Bridge Loan (NIMBL)

Late payments of government grants and contracts are a persistent and growing problem for nonprofits in Maryland. They limit cash flow, forcing nonprofits to adopt an unsustainable business model of providing services and challenging nonprofits to meet the obligations of government grants and contracts prior to payment. Delayed funding can damage the public’s trust in the nonprofit sector, as creditors and vendors are reluctant to do business with us. This makes it harder for nonprofits to secure grants and other funding sources, which further strain our resources. 

Created in 2017, the Nonprofit, Interest-Free, Micro Bridge Loan (NIMBL) program provides short-term financing to qualifying nonprofits who have received written confirmation of funding from government grants or contracts and not yet received funding. 

The program is administered by the Maryland Department of Commerce as part of the Nonprofit Development Center at Maryland Nonprofits. 

To qualify for NIMBL, a nonprofit must have annual revenues not greater than $750,000, have been in existence for not more than 10 years, be located in Maryland, and be tax-exempt under Section 501(c) (3), (4) or (6) of Internal Revenue Code. Grants and contracts from any government agency (including federal, state, county and municipal governments) are eligible. 

Governments are a major source of nonprofit revenue in Maryland. The National Council of Nonprofits reports 31.8% of all charitable nonprofit revenue from government grants/contracts. The COVID-19 Pandemic and Racial Equity Survey by Maryland Nonprofits suggests governments are an even greater proportion of revenue for smaller nonprofits. 

“…most government grants work on a reimbursement basis which makes it difficult for small organizations like ours” said Nancy Easterling, Executive Director of Historic Sotterley, Inc. in 2022 testimony supporting increased funding to NIMBL. “The Nonprofit Interest-Free Micro Bridge Loan has been a godsend to Sotterley and it can be the same thing for many other nonprofits, all of which are serving our communities.” 

For the past three consecutive Maryland General Assembly regular sessions, Senator Cheryl Kagan has introduced legislation to increase funding to NIMBL. The Maryland FY 2022 Operating budget increased the fund balance to $400,000. The fund balance may not exceed $1,000,000 under law.  

The Department of Commerce received 11 applications in 2022 and funded all 11 with the maximum allowable award of $25,000. All 2022 applications were approved on the day received and all disbursements were processed in under 30 days. Repayment of the loan must be no later than the date of the final grant or contract payment to the nonprofit. Loans may only be used for operating expenses. 

Since inception of the program, twenty-eight (28) loans have been approved and funded for a total of $689,760.