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Financial Services Law Insights and Observations

Fed expands MSLP to nonprofits

Federal Issues Covid-19 Federal Reserve Lending

Federal Issues

On July 17, the Federal Reserve Board announced that the Main Street Lending Program will support tax-exempt, nonprofit organizations. In June, the Board proposed expanding the program to certain nonprofits (covered by InfoBytes here), and in response to public feedback on the proposal, the Board (i) set the minimum employment threshold for nonprofits to 10 employees from the proposed 50; (ii) eased the donation-based funding limit; and (iii) adjusted several financial eligibility criteria to accommodate a wider range of nonprofit operating models.

The Main Street nonprofit loans have similar terms as the Main Street for-profit business loans, including the “interest rate, principal and interest payment deferral, five-year term, and minimum and maximum loan sizes.” The Board’s announcement also contains a chart covering the detailed changes and term sheets for the program’s Nonprofit Organization Expanded Loan Facility and Nonprofit Organization New Loan Facility.