The Main Street Lending Program is a federal loan program that was originally designed to provide access to credit for small- to medium-size for-profit businesses that need the financing due to the COVID-19 pandemic.
The program has now been extended to eligible nonprofit organizations that were in sound financial condition before the onset of the COVID-19 pandemic and that are in need of help due to COVID-19.
Definition of a nonprofit organization
For the purposes of the program, a nonprofit organization is a tax-exempt nonprofit organization described in section 501(c)(3) of the Internal Revenue Code (“IRC”) or a tax-exempt veterans’ organization described in section 501(c)(19) of the IRC. Other forms of organizations may be considered for inclusion as nonprofit organizations at the discretion of the Federal Reserve.
Two nonprofit loan facilities
To implement the program the Federal Reserve of Boston established a Special Purpose Vehicle to purchase participation in loans originated by eligible lenders. That SPV contains two separate loan facilities for nonprofits — the Nonprofit Organization New Loan Facility (NONLF) and the Nonprofit Organization Expanded Loan Facility (NOELF). Eligible lenders may originate new loans under the NONLF or increase the size of (or "upsize") existing loans under the NOELF made to eligible borrowers.
U.S. nonprofit organizations may be eligible for loans if they meet the criteria set out in the term sheets. The table below highlights some of the key features of each kind of loan. The information is based on the most recent term sheets provided by the Federal Reserve, which were released on July 28. For more details see the term sheets, which can be accessed from the Federal Reserve’s website.