The Federal Reserve has expanded eligibility for the Main Street Lending Program to certain nonprofit organizations. As we covered in our blog The Federal Reserve Rolls Out the Main Street Lending Program, this program offers four year loans to companies employing up to 10,000 workers or with revenues of less than $2.5 billion. Last month, the Federal Reserve proposed expanding the program to include nonprofits, and just recently approved the expansion. Here’s what you should know.

What is the Main Street Lending Program?

The program is authorized under the Coronavirus Aid, Relief and Economic Security (CARES) Act and is designed to support businesses (to now include nonprofits) that were in sound financial condition before the onset of the COVID-19 pandemic. It offers 4-year loans to companies employing up to 10,000 workers or with revenues of less than $2.5 billion. Principal and interest payments on these loans are deferred for one year.

Banks eligible to participate in this lending program will be able to assist borrowers in originating either new Main Street loans (Main Street New Loan Facility) or use Main Street loans to increase the size of an already existing loan (Main Street Expanded Loan Facility).

Recent modification to include nonprofits

The Federal Reserve Board voted to modify the program to provide greater access to credit for nonprofits (including educational institutions, hospitals and social service organizations) and approved two new loan options to provide support to tax-exempt organizations.

The spread of COVID-19 has disrupted many sectors of the economy, including the nonprofit sector, and in many cases nonprofits need financing to continue providing essential services to communities.

Here’s what’s new:

Need assistance navigating the Main Street Lending Program rules? Not sure if you’re eligible?

We can help. Contact us.