COVID-19 Updates

Nonprofits Now Eligible for Main Street Lending Program Loans

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Today, the Federal Reserve announced the expansion of the Main Street Lending Program (the “Program”) to include loans to certain nonprofits.  Nonprofits must meet the following criteria to be eligible for the Program:

  • tax-exempt under Section 501(c)(3) or 501(c)(19) of the Internal Revenue Code;
  • continuously operating since January 1, 2015;
  • created or organized in the U.S. and has a majority of its employees and significant operations in the U.S.;
  • at least 10 employees;
  • 2019 annual revenue of $5 billion or less or 15,000 or fewer employees;
  • endowment of less than $3 billion;
  • non-donation revenue greater than or equal to 60% of its 2017-2019 expenses (less depreciation, depletion and amortization);
  • “non-donation revenue” includes: government grants; revenue from supporting organizations; grants from private foundations that are disbursed over more than one calendar year; and contributions of property besides money, stocks, bonds, and securities
  • at least a 2% ratio of adjusted 2019 earnings before interest, depreciation, and amortization (“EBIDA”) to unrestricted 2019 operating revenue;
  • average of at least 60 days’ liquid assets on hand for the past year;
  • at the time of origination, has greater than a 55% ratio of unrestricted cash and investments to the total of outstanding and undrawn available debt, plus the Program loan, plus any CMS Accelerated and Advance Payments;
  • did not receive funds under any other Program loan facility, the Primary Market Corporate Credit Facility, the Municipal Liquidity Facility or under the industry-specific relief provisions of Title IV of the CARES Act.

Nonprofits that received loan under the PPP or EIDL are still eligible for Program loans, provided they satisfy the criteria above.

Two types of loans are available to eligible nonprofits under the Program:  Nonprofit New Loans and Nonprofit Expanded Loans.  The minimum loan size for Nonprofit New Loans is $250,000, and the minimum for Nonprofit Expanded Loans is $10 million.  The maximum loan size for Nonprofit New Loans is the lesser of $35 million or the borrower’s average 2019 quarterly revenue and for Nonprofit Expanded Loans, the maximum is the lesser of $300 million or the borrower’s average 2019 quarterly revenue.

Like Program loans to businesses, the nonprofit Program loans are not forgivable.  The other terms of the Program applicable to nonprofits parallel those applicable to business, which means that nonprofit loans will have 5-year terms with interest deferred for one year and principal deferred for 2 years and will use a LIBOR +3% interest rate.

More information is available in the Nonprofit New Loan Term Sheet and the Nonprofit Expanded Loan Term Sheet.  Additional details will also continue to be released on the Program webpage.

Program loan applications will be accepted directly by participating lenders.  Interested nonprofits should reach out to their existing lenders or to Program lenders who are accepting new customer applications (listed here) to begin the process of obtaining a Program loan.

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For more information about the Main Street Lending Program, please contact your attorney at Gravel & Shea PC or any of the following attorneys at the firm:

Chip Mason (, Cassandra LaRae-Perez (,  Oliver Goodenough (, Keith Roberts (, Pauline Law (, or Catherine Burke (