COVID-19 - The Main Street Lending Program: Federal Reserve Proposes Expansion to Non-Profit Organizations
The Main Street Lending Program (the “Program”) is a financial assistance program established by the Federal Reserve System to support small and medium-sized businesses affected by the COVID-19 pandemic. The Program authorizes eligible lenders to originate up to $600 billion in eligible loans through three separate facilities - the Main Street New Loan Facility (the “New Facility”), the Main Street Priority Loan Facility (the “Priority Facility”), and the Main Street Expanded Loan Facility (the “Expanded Facility”). A special purpose vehicle (“SPV”) formed by the Federal Reserve will purchase 95% participations in these loans. Please consult our previous Client Alerts on the April 30th Program Guidance, May 27th Program Guidance and June 8th-11th Program Guidance for additional details on the Program terms previously announced.
On June 15th, the Federal Reserve announced a proposal to expand the Program to small and medium-sized nonprofits that were in sound financial condition before the COVID-19 pandemic. Two loan options were proposed – a nonprofit new loan facility and a nonprofit expanded loan facility. Under the proposed terms sheets, these nonprofit facilities would differ from their corresponding for-profit Main Street facilities as follows: