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Federal Reserve Approves Nonprofit Organizations for Main Street Lending Program

September 17, 2020

Attention nonprofits: the Main Street Lending Program has been expanded to include tax-exempt organizations. Here's how you can benefit.

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:

Main Street Lending Program Nonprofit Loan Options

New Loans

Expanded Loans


5 years (same for both)

Minimum Loan Size


$10 Million

Endowment Cap

$3 Billion (same for both)

Years in Operation

Minimum 5 years (same for both)

Eligibility Criteria

  • 10 employees minimum
  • Exempt from federal income tax under section 501(c)(3) or 501(c)(19)
  • 2019 operating margin of at least 2%
  • Total non-donation revenues greater than or equal to 60% of expenses for the period from 2017 through 2019
  • 60 days- current days cash on hand
  • Present debt repayment capacity greater than 55%

Maximum Loan Size

Lesser of $35 Million or borrower’s avg. 2019 quarterly revenue

Lesser of $300 Million or borrower’s avg. 2019 quarterly revenue


Principal deferred two years
Interest deferred one year
(same for both)

Interest Rate

LIBOR + 3%
Check out our blog, What You Should Know about the LIBOR Phase-Out for more on LIBOR.
(same for both)

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

We can help. Contact us.

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