Main Street Lending Program modified to provide greater access to Nonprofits

July 17, 2020


By Diana Miller

On Friday, July 17th, the Federal Reserve Board modified the Main Street Lending Program, providing additional access to nonprofit organizations such as social service organizations, hospitals, and educational institutions. Nonprofit organizations are vital to the communities they serve and these changes are welcomed news to the nonprofit sector.

Although not yet operational, 2 new loan options were released today to help nonprofit organizations due to the COVID pandemic. Once they are operational, additional information about the application process for nonprofit organizations will be made available.


Most of the terms are similar to those offered to for-profits, such as:

  • Interest rate stayed at LIBOR + 3%
  • Deferral of principal (two years) and interest (one year)
  • Term of 5 years

However, there are some changes and differences between the 2 loans such as:

  • Years in operation: at least 5 years
  • Endowment cap: $3 billion
  • Loan sizes:
    • NONLF – Minimum is $250,000 and Maximum is the lesser of $35M or the borrower’s average 2019 quarterly revenue
    • NOELF – Minimum is $10M and Maximum is the lesser of $300M or the borrower’s average 2019 quarterly revenue
  • Eligible criteria:
    • Continuous operation since January 1, 2015
    • Minimum employees 10 (previously 50)
    • Is not an Ineligible Business
    • Meets at least 1 of the following 2 conditions: (1) has 15,000 employees or fewer, or (2) had 2019 annual revenues of $5 billion or less
    • Total non-donation revenues equal to or greater than 60% of expenses for the period from 2017 through 2019 (previously 70% of revenues)
    • 2019 operating margin of 2% or more (previously 5%)
    • Current days cash on hand 60 days (previously 90 days)
    • Current debt repayment capacity—ratio of cash, investments, and other resources to outstanding debt and certain other liabilities—of greater than 55% (previously 65%)
    • Is created or organized in the US or under the laws of the US with significant operations in and a majority of its employees based in the US
    • Cannot participate in both the NOELF and NONLF; cannot also participate in the MSNLF, the MSPLF, the MSELF, the Primary Market Corporate Credit Facility, or the Municipal Liquidity Facility
    • Has not received specific support pursuant to the Coronavirus Economic Stabilization Act of 2020 (Subtitle A of Title IV of the CARES Act)

Required Borrower Certifications and Covenants

As expected, there are required borrower certifications and covenants for both loans that are not limited to, but include:

  • Commit to refrain from repaying the principal balance of, or paying any interest on, any debt until the Eligible Loan is repaid in full, unless the debt or interest payment is mandatory and due
  • Commit that it will not seek to cancel or reduce any of its committed lines of credit with the Eligible Lender or any other lender
  • Certify that it has a reasonable basis to believe that, as of the date of origination of the Eligible Loan and after giving effect to such loan, it has the ability to meet its financial obligations for at least the next 90 days and does not expect to file for bankruptcy during that time period
  • Commit that it will follow compensation, stock repurchase, and capital distribution restrictions that apply to direct loan programs under section 4003(c)(3)(A)(ii) of the CARES Act
  • Certify that it is eligible to participate in the Facility, including in light of the conflicts of interest prohibition in section 4019 of the CARES Act

Retaining Employees

As with many of the other funding sources being provided, eligible borrowers under both loans should make reasonable efforts to maintain its payroll and retain its employees during the time the loan is outstanding.


Borrowers will have to pay loan origination and servicing fees to the lender of up to 75 basis points of the principal amount of the loan at origination for the NOELF (100 for NONLF).

Lenders may also require the borrowers to pay a transaction fee of 75 basis points of the principal amount of the loan at origination, that the lender will pay the special purpose vehicle for the NOELF (100 for NONLF).

Unless extended, the Federal Reserve Bank will stop purchasing participations in eligible loans on September 30, 2020.

Concerns about your nonprofit's Main Street Lending Program eligibility? A Wiss expert can help.


Reach out to a Wiss team member for more information or assistance.

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