Fed Unveils Plan to Extend Emergency Loans to Nonprofits - The Wall Street Journal

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The Fed said the Main Street Lending Program will be open to nonprofit organizations with... — The Fed said the Main Street Lending Program will be open to nonprofit organizations with at least 10 employees and as many as 15,000 employees.
Photo: Patrick Semansky/Associated Press

July 17, 2020 10:00 am ET

The Federal Reserve formally unveiled terms Friday that will allow nonprofit organizations to borrow through its $600 billion loan program for small and midsize businesses disrupted by the coronavirus pandemic.

The central bank had earlier put forward a proposal to extend the Main Street Lending Program to schools, hospitals and other social-service organizations. The terms announced Friday will open the program to nonprofit organizations with at least 10 employees and as many as 15,000 employees.

The Fed also eased certain financial eligibility criteria to allow a wider range of nonprofit operating models. The loans will be available to nonprofits with endowments of no more than $3 billion and that have been in operation at least five years.

Under the program, the Fed is buying 95% of eligible loans made by banks. Loan terms under the nonprofit lending options are similar to those available to for-profit businesses. Five-year loans carry an interest rate of 3 percentage points above a widely used short-term lending benchmark rate; interest payments are deferred for one year, and principal payments, for two years.

The Main Street program has been the most difficult of the Fed’s new emergency lending operations to get up and running. The program opened for lender registration last month and began processing loans last week.

The Fed said Thursday it had purchased $12 million in loans over the week ended Wednesday.

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Fed Unveils Plan to Extend Emergency Loans to Nonprofits - The Wall Street Journal

The Fed said the Main Street Lending Program will be open to nonprofit organizations with at least 10 employees and as many as 15,000 employees.

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Fed Unveils Plan to Extend Emergency Loans to Nonprofits - The Wall Street Journal

The Fed said the Main Street Lending Program will be open to nonprofit organizations with at least 10 employees and as many as 15,000 employees.

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