On July 23, 2020, the Federal Reserve published Frequently Asked Questions (FAQs) in connection with its expansion of the Main Street Lending Program (MSLP or Program) to certain nonprofit organizations that are tax-exempt under sections 501(c)(3) and 501(c)(19). The Federal Reserve did not announce when borrowers will be able to access the Program.
The 37-page FAQ details how a nonprofit organization is defined, specific eligibility requirements, how to apply for a loan, whether an eligible entity automatically qualifies, and what financial institutions are eligible to make loans under the Program.
The FAQs expand on the Program's term sheets, which were finalized on July 17, 2020. As we previously reported, two loan facilities are offered – one for new loans and one for expanded loans (increasing the limit of an existing term loan or revolving credit facility). Eligible entities include nonprofits that have at least 10 employees and no more than 15,000 employees and an endowment of no more than $3 billion. Loans can range from $250,000 to $10 million.
The Federal Reserve is currently working to create the infrastructure, including legal documents and certifications, necessary to fully operationalize the facilities. It is expected that the FAQs will be updated to address additional frequently asked questions as this infrastructure is created and after the facilities become operational.
Steptoe's Exempt Organizations and Financial Services practices can assist nonprofit organizations wishing to apply for a MSLP loan when the Program goes live.
For more information about the MSLP for for-profit institutions, please review Steptoe's summary here.