Prudential Loan Fund FAQs
The following are frequently asked questions and answers on the Prudential Loan Fund.
What is the Prudential Loan Fund?
It can sometimes take weeks or months for nonprofits to receive promised payments from government grants or contracts. And in the frenzied time before a gala or big fundraiser, not all bills can be invoiced later during cash-strapped times. Nonprofits depend on steady funding to deliver services, pay staff, and keep the lights on.
The Prudential Loan Fund provides bridge loans to arts organizations funded by the Geraldine R. Dodge Foundation. Loans are meant to help organizations get through short-term budget gaps when expected revenues have not yet arrived.
The no-fee, zero-interest loan is repaid when the delayed payment is finally received.
Who might use it?
The Prudential Loan Fund is open to arts nonprofits with budgets of $5 million or less that have received funding from Dodge for at least three years.
If you meet these criteria and your organization receives funding from New Jersey State Council on the Arts or through contracts from the state or federal government you may apply for a loan. It may also apply to cover upfront expenses incurred related to annual galas or fundraising events.
As long as your organization can show that there will be a grant or other income being paid at a specific point, the loan can help you continue operating without a disruption.
When can I apply?
There are two application periods for the Prudential Loan Fund, typically in spring and fall. Please check the Prudential Loan Fund website for upcoming deadlines.
How much of a loan can I request?
Loan amounts may range from $10,000 to $50,000.
What are the terms of the loan?
All loans are interest free with no fees and require full repayment of principal up to six months after the loan is disbursed.
What kind of documentation is required with the application?
You’ll need to submit a brief overview of the reason for the loan, the organization’s most recent audited financial statement and 990, a cash-flow analysis for the current fiscal year, a current year budget, and a board resolution authorizing loan.
Applicants are also required to attend the Prudential Loan Fund information session and cash-flow workshop led by facilitator Hilda Polanco. In addition to an overview of the fund, the workshop covers strategic financial management, nonprofit financial health, cash-flow projections, and demystifying financial reports.
The information sessions are typically held within a month of the application deadline.
How do I apply?
Applications are available to attendees of the Prudential Loan Fund information session. If you have any questions, you may email Richard Simon at rsimon(at)grdodge(dot)org.
What is the loan approval process and other considerations?
Applications and supporting documents are reviewed by a committee of internal and external members, who will review:
- Applicants' financial position and ability to repay loan funds in lump sum payment.
- Sufficient documentation of previous special event revenues.
Loans may not be funded due to limited availability of dollars.
Foundation staff will contact the applicant if additional information or clarification.
If the loan is approved, a loan documentation form will be sent to the applicant prior to the release of the funds.
Every effort will be made to expedite the application process to enable applicants, if approved, to receive loan funds in a timely fashion.
When did the Prudential Loan Fund start?
The Prudential Loan Fund was founded in 2015 with a $1 million endowment from the Prudential Foundation. It is administered through the Geraldine R. Dodge Foundation, which for more than 40 years has been the largest private funder of the arts in New Jersey. It supports organizations that pursue the highest standard of artistic excellence, enhance the cultural health and richness of communities and contribute to the state’s creative economy.
Who can I contact for more information?
If you have any other questions, please contact Richard Simon, Senior Program Associate, Arts and Education.