Buchalter COVID-19 Client Alert: Main Street Lending Program Expanded to Include Nonprofit Organizations

Buchalter

The Federal Reserve has announced that the Main Street Lending Program will now be available to non-profits such as educational institutions, hospitals, and social service organizations, and has issued a set of Frequently Asked Questions regarding the new Nonprofit Organization New Loan Facility and Nonprofit Organization Expanded Loan Facility.  Under the Nonprofit Organization New Loan Facility, eligible non-profits may obtain loans from $250,000 to the lesser of $35M, or the borrower’s average 2019 quarterly revenue.  Under the Nonprofit Organization Expanded Loan Facility, eligible non-profits may obtain loans from $10 million to the lesser of $300M, or the borrower’s average 2019 quarterly revenue.   To be eligible, a non-profit must:

  • Be US-based and operational since at least January 1, 2015;
  • Have either fewer than 15,000 employees or $5 billion or less in 2019 revenues;
  • Have an endowment of less than $3 billion;
  • Have at least a 2% EBIDTA ratio (the ratio of adjusted 2019 earnings before interest, depreciation, and amortization (EBIDA);
  • Have total non-donation revenues equal to or greater than 60% of its expenses between 2017 and 2019.

Additional requirements and criteria for the nonprofit facility loans are found in the FAQs and term sheets for the NONLF and NOELF.  Links to those documents are located on the Federal Reserve MSLP webpage:    https://www.federalreserve.gov/monetarypolicy/mainstreetlending.htm

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