Can you use an SBA loan to acquire a 501(c)(3) charitable nonprofit

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November 30, 2020

by a searcher from University of Dallas in Houston, TX, USA

Simple question

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Reply by a searcher
from Western Michigan University in Grand Rapids, MI, USA
A non-profit organization that has qualified for tax emption cannot be sold or purchased. NPOs do not have owners like you would have in a for-profit venture because the operations of an NPO is for the public good and cannot benefit a single individual or specific group of individuals. An NPO selling assets also has to be careful because such a transaction may be considered unrelated income and be table. Definitely consult with an expert.
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Reply by a professional
in Fort Worth, TX, USA
No. As an old SBA banker once told me, the only church's eligible for SBA loans are Church's Chicken. Applies to all 501c3, not just churches though.
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