June 29, 2020

Federal Reserve Considers Expanding Main Street to Not-for-Profits


As part of its recent review of the CARES Act loan programs, the Federal Reserve is evaluating whether to expand its Main Street loan facilities to include not-for-profit organizations. The lending program is designed to provide low-interest, government-backed loans with fewer lender requirements for organizations financially affected by the COVID-19 pandemic.

The Main Street Lending Program currently has three primary loan facilities for businesses: the Main Street New Loan Facility, the Main Street Priority Loan Facility, and the Main Street Expanded Loan Facility. Feedback from the initial facilities indicated that the borrower requirements may exclude not-for-profit organizations that could use the liquidity to manage through the COVID-19 disruption, particularly organizations with fewer employees, a shorter operational history, and those with more restricted liquidity and ability to pay debt.

In response, the Federal Reserve is proposing two new not-for-profit Main Street lending facilities that offer slightly different borrower requirements than the Federal Reserve’s current Main Street loan facilities: the Nonprofit New Loan Facility and Nonprofit Expanded Loan Facility.

Snapshot of the Facilities

The feedback period on the two new not-for-profit facilities closed on June 22. In the proposed requirements, organizations must be either a 501(c)(3) charitable organization or a 501(c)(19) veteran’s organizations. Borrowers must also meet the following criteria into to be eligible for the Federal Reserve program:

  • Less than $3 billion in endowments
  • At least 5 years in operation
  • Employee head count of at least 50 but not more than 15,000
  • Revenues less than $5 billion with less than 30% of revenues coming from donations

In exchange, the nonprofit loan facilities offer the following features:


Nonprofit New Loans

Nonprofit Expanded Loans


5 years

Interest Payments

Deferred for one year


LIBOR + 3%

Minimum Loan Size


$10 million

Maximum Loan Size

The lesser of $35 million, or the borrower's average 2019 quarterly revenue

The lesser of $300 million, or the borrower's average 2019 quarterly revenue

Principal Repayment

Principal deferred for two years; and repaid in years 3-5 at 15%, 15%, 70%



As with the Main Street Loan Facilities, the Federal Reserve retains 5% of the risk of the loans, which helps offset the risk for participating lenders.

Stay Tuned

Additional adjustments to the loan facilities may be coming as the Federal Reserve sifts through the feedback it received. We will keep you up-to-date with that information as it becomes available. For more information about COVID-19 lending opportunities, please contact a member of our team. Additional COVID-19 related insights can be found in our COVID-19 Resource Center.

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