The Main Street Lending Program is extended to nonprofit organizations
ComplianceOctober 08, 2020

The Main Street Lending Program is extended to nonprofit organizations

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

The Main Street Lending Program is Extended to Nonprofit Organizations
The Main Street Lending Program
Extended to Nonprofit Organizations

Applying for an MSLP loan

Interested nonprofit organizations can apply for one of the Main Street Lending Program loans through an eligible lender. Eligible lenders are expected to conduct an assessment of each potential borrower’s financial condition at the time of the potential borrower’s application. Potential borrowers should expect to provide their lenders with various documents and financial records to allow the lender to assess both the organization’s eligibility and its creditworthiness.

For assistance in obtaining a nonprofit organization’s business entity documents such as a certified copy of the formation document and a certificate of existence contact a CT representative.

Sandra Feldman
Publications Attorney
Sandra (Sandy) Feldman has been with CT Corporation since 1985 and has been the Publications Attorney since 1988. Sandy stays on top of the most pressing and pertinent business entity law issues that impact CT customers of all sizes and segments.