Schneider Downs continues to track the evolving landscape of federal financial programs offered in the wake of the business disruption caused by the COVID-19 pandemic.
On July 17, the Federal Reserve announced that it would modify the Main Street Lending Program (Main Street) to allow greater access to credit for not-for-profit organizations (i.e., tax-exempt organizations as described in Section 501(c)(3) or 501(c)(19) of the Internal Revenue Code) that were in sound financial condition prior to the pandemic.
The two Main Street loan options for not-for-profit organizations have updated terms, as summarized below (changes from the prior not-for-profit proposal released for comment in mid-June are in italics):
|
New Main Street Loans |
Expanded Main Street Loans |
|
|---|---|---|
| Term |
Five years |
|
| Minimum Loan Size |
$250,000 |
$10,000,000 |
| Endowment Cap |
$3 billion |
|
| Years in Operation |
At least five years |
|
| Eligibility Criteria |
|
|
| Maximum Loan Size | Lesser of $35M or the borrower’s average 2019 quarterly revenue | Lesser of $300M or the borrower’s average 2019 quarterly revenue |
| Risk Retention | 5% | |
| Principal Payment | Principal deferred two years, years 3-5: 15%, 15%, 70% | |
| Interest Payments | Deferred one year | |
| Rate | LIBOR + 3% | |
If you have other questions regarding the Main Street program, reach out first to your bank and other lenders to see if you can apply for Main Street funding through them. If you need more information, please reach out to any of your connections at Schneider Downs or contact Joel Rosenthal at [email protected].
