The Federal Reserve Board seeks public comment on a proposal to expand its Main Street Lending Program to provide access to credit for nonprofit organizations, including hospitals.
Under the proposal, small and medium-sized nonprofits “of sound financial condition” prior to the public health emergency could be eligible to receive loans to help alleviate financial burden due to COVID-19. The loan terms for newly eligible nonprofits — such as interest rate, deferral of principal and interest payments, and five-year maturity — are identical to those for business loans. Loan sizes will range from $250,000 to $300 million. The Federal Reserve Board would defer the first two years of principal payments and one year of interest payments for nonprofits.
Borrower eligibility requirements for nonprofit facilities would include;
- a minimum of 50 and maximum of 15,000 employees;
- financial thresholds based on operating performance, liquidity, and ability to repay debt;
- an operational history of at least five years;
- a limit on endowments of no more than $3 billion; and
- tax-exempt status under section 501(c)(3) or 501(c)(19) of the Internal Revenue Code.
Feedback may be submitted online until Monday, June 22. Feedback will be made available to the public; comments should not include confidential information.
Contact Senior Director of Policy Erin O’Malley at firstname.lastname@example.org or 202.585.0127 with questions.