This is a commitment by a lender to advance a specified amount of funds for a period of time (i.e. a line of credit) for a particular project, which may be drawn down only if budgeted income does not materialise.

NCVO Knowhow Nonprofit offers advice and support for voluntary organisations. Learn from experts and your peers, and share your experiences with the community.

About us

to post a comment

Describe the issue (optional)

contents list

How-tos are written by our users to share practical knowledge.

A loan that is not collateralised against tangible assets.

Working capital is the funding required to manage the timing differences of income and expenditure. ‘Open’ working capital tides an organisation over before it has raised all the money it needs to meet its costs. ‘Closed’ working capital tides an organisation over before committed funding is paid, by means of a bridging loan or an overdraft. [..]

This is finance that can be used exactly where the organisation needs it to further its objectives. The funds can be in the form of grants, loans, reserves, equity etc.