The Federal Reserve’s Main Street Lending Program is accepting loan applications to assist nonprofits experiencing cash flow problems due to the COVID-19 pandemic.
The Federal Reserve Bank of Boston announced on Sept. 4 the Main Street Lending Program has expanded from offering loans to businesses, which it has been doing since July 6, to offer similar loans to nonprofit entities.
“Nonprofit entities — including most hospitals, educational institutions, and social service organizations — play critical roles in our society and our economy, while employing a significant share of the country’s workforce,” said Eric Rosengren, president of the Boston Federal Reserve Bank, which is administering the program for the Federal Reserve System.
The Main Street Lending Program is designed to “help credit flow to small- and medium-sized … nonprofit organizations that were in sound financial condition prior to the pandemic,” according to a Federal Reserve press release.
Once issued by eligible lenders, the Federal Reserve purchases 95% of the loan, while the lender retains 5%. The borrower pays no interest until year two and no principal until year three.
The program offers 5-year loans, with floating rates. Eligible nonprofits must employ at least 10 people and have been in operation for at least five years. Other requirements are available at https://tinyurl.com/MainStreetNonprofits. Main Street loans are not grants and cannot be forgiven.
Interested lenders and borrowers can visit www.bostonfed.org/mslp to find program information, including frequently asked questions, and can subscribe for e-mail updates. Inquiries about the program can be emailed to [email protected].