The Federal Reserve has announced that it will be seeking public feedback on a proposal to expand its Main Street Lending Program to provide access to credit for nonprofit organizations.
Originally the Main Street Lending Program was created for small and mid-sized businesses that were in good financial standing before the crisis, the proposed expansion would offer loans to small and medium-sized nonprofits that were in sound financial condition before the coronavirus pandemic and could benefit from additional liquidity to manage through this challenging period.
"Nonprofit organizations are critical parts of our economy, employing millions of people, providing essential services to communities, and supporting innovation and the development of a highly skilled workforce," Federal Reserve Chair Jerome H. Powell said. "Nonprofits provide vital services across the country and we are working to help them through this difficult time."
Loan terms under the proposed Main Street nonprofit loans, including the interest rate, deferral of principal and interest payments, and five-year term, are the same as for Main Street business loans. The minimum loan size is $250,000 while the maximum loan size is $300 million.
Since the MSLP was announced in early April there has been a push by members of Congress to allow nonprofits to participate in the program. Both Senator Dianne Feinstein (D-CA) and Representative Adam Schiff (D-CA-28) wrote letters to Fed Chairman Jerome Powell urging the Fed to include nonprofits as eligible to receive loans from the Main Street Lending Program. Feinstein wrote in her letter "Nonprofits such as these are not only important to the U.S. economy, they provide the services and anchor our communities. They will be a necessary part of an effective post-crisis recovery."
Because the circumstances, structure, and needs of nonprofit organizations vary widely, public feedback is being sought to help make the proposed program as efficient and effective as possible. Feedback may be submitted via email here until Monday, June 22. Feedback will be made available to the public, and comments should not include confidential information.