(Reuters) – The U.S. Federal Reserve on Friday opened its “Main Street” loan program to non-profits, allowing education, health, social service and other groups with as few as 10 employees to tap central bank funding.

The loan terms were broadened significantly from an initial proposal floated by the Fed in mid-June, including lowering the employee threshold from 50 workers and easing some revenue and operating margin requirements developed as a way to rate the financial health of non-profit organizations.

“Nonprofits provide vital services across the country and employ millions of Americans,” Federal Reserve Chair Jerome Powell said in a statement. “We have listened carefully and adapted our approach so that we can best support them in carrying out their vital mission during this extraordinary time.”

Main Street Lending Program

The Federal Reserve established the Main Street Lending Program (Program) to support lending to small and medium-sized businesses and nonprofit organizations that were in sound financial condition before the onset of the COVID-19 pandemic.

The Program operates through five facilities: the Main Street New Loan Facility (MSNLF), the Main Street Priority Loan Facility (MSPLF), the Main Street Expanded Loan Facility (MSELF), the Nonprofit Organization New Loan Facility (NONLF) and the Nonprofit Organization Expanded Loan Facility (NOELF).

Term sheets for each facility and frequently asked questions (FAQs) (PDF) providing more information regarding eligibility and conditions can be found below.

• Operational Status. The MSNLF, MSPLF and MSELF are fully operational and ready to purchase participations in eligible loans that are submitted through the Main Street Lender Portal (Portal) by eligible lenders. To submit a participation funding request through the Portal, lenders must first complete lender registration. Registration instructions and the form loan participation agreement, form borrower and lender certifications and covenants, and other required form agreements can be found on the Federal Reserve Bank of Boston’s Main Street Lending Program Forms and Agreements website. The NONLF and NOELF are not yet operational. The Federal Reserve is currently working to create the infrastructure necessary to fully operationalize the Nonprofit Facilities.

• Structure. To implement the Program, the Federal Reserve Bank of Boston has set up a special purpose vehicle (SPV) to purchase participations in loans originated by eligible lenders. Lenders will retain a percentage of the loans. U.S. businesses and nonprofit organizations may be eligible for loans if they meet the criteria laid out in the term sheets. Loans issued under the Program would have a five year maturity, deferral of principal payments for two years, and deferral of interest payments for one year. Eligible lenders may originate new loans (under MSNLF, MSPLF and NONLF) or increase the size of (or “upsize”) existing loans (under MSELF and NOELF) made to eligible borrowers.

• How do eligible borrowers apply? Small and medium-sized businesses interested in the Program can apply for Program loans by contacting an eligible lender. More information for eligible borrowers, including a listing of registered lenders, who are accepting new customers and have elected to be listed, can be found on the Federal Reserve Bank of Boston Information for Borrowers website. Once the NONLF and NOELF are operational, additional information about the application process for nonprofit organizations will be made available.

• What documents should eligible lenders prepare? The Program loan participation agreement, form borrower and lender certifications, and other required form agreements for MSNLF, MSPLF and MSELF loans can be found on the Federal Reserve Bank of Boston’s Main Street Lending Program Forms and Agreements website. The Federal Reserve is not providing form loan documents for eligible lenders to use when making eligible loans to eligible borrowers. Loan documents related to any loans that are participated to the SPV must reflect the terms of the Program and must include the items set out in the loan document checklist contained in Appendix A of the Main Street FAQs (PDF). Once the NONLF and NOELF are operational, additional information about the application process for nonprofit organizations will be made available.

Main Street New Loan Facility (MSNLF)

• Term Sheet (June 8, 2020) (PDF)

Main Street Priority Loan Facility (MSPLF)

• Term Sheet (June 8, 2020) (PDF)

Main Street Expanded Loan Facility (MSELF)

• Term Sheet (June 8, 2020) (PDF)

Nonprofit Organization New Loan Facility (NONLF)

• Term Sheet (July 17, 2020) (PDF)

Nonprofit Organization Expanded Loan Facility (NOELF)

• Term Sheet (July 17, 2020) (PDF)

Main Street Lending Program Frequently Asked Questions (FAQs)

• Frequently Asked Questions (July 15, 2020) (PDF)
• Frequently Asked Questions (June 26, 2020) (No longer effective) (PDF)
• Frequently Asked Questions (June 20, 2020) (No longer effective) (PDF)
• Frequently Asked Questions (June 8, 2020) (No longer effective) (PDF)
• Frequently Asked Questions (May 27, 2020) (No longer effective) (PDF)
• Frequently Asked Questions (April 30, 2020) (No longer effective) (PDF)

Main Street Lending Program Forms and Agreements

• Federal Reserve Bank of Boston’s Website

Additional information

Reports to Congress

• Periodic Report: Update on Outstanding Lending Facilities Authorized by the Board under Section 13(3) of the Federal Reserve Act (PDF) (July 7, 2020)
• Periodic Report: Update on Outstanding Lending Facilities Authorized by the Board under Section 13(3) of the Federal Reserve Act (PDF) (June 7, 2020)
• Periodic Report: Update on Outstanding Lending Facilities Authorized by the Board under Section 13(3) of the Federal Reserve Act (PDF) (May 15, 2020)
• Report to Congress Pursuant to Section 13(3) of the Federal Reserve Act: Main Street New Loan Facility (PDF) (April 16, 2020)
• Report to Congress Pursuant to Section 13(3) of the Federal Reserve Act: Main Street Expanded Loan Facility (PDF) (April 16, 2020)
• Report to Congress Pursuant to Section 13(3) of the Federal Reserve Act: Main Street Priority Loan Facility (PDF) (May 8, 2020)

Related Press Releases

• Federal Reserve Board modifies Main Street Lending Program to provide greater access to credit for nonprofit organizations such as educational institutions, hospitals, and social service organizations (July 17, 2020)
• Federal Reserve Board announces it will be seeking public feedback on proposal to expand its Main Street Lending Program to provide access to credit for nonprofit organizations (June 15, 2020)
• Federal Reserve Board expands its Main Street Lending Program to allow more small and medium-sized businesses to be able to receive support (June 8, 2020)
• Federal Reserve Bank of Boston releases additional information for potential lenders and borrowers in the Main Street Lending Program (May 27, 2020)
• Federal Reserve Board announces it is expanding the scope and eligibility for the Main Street Lending Program (April 30, 2020)
• Federal Reserve takes additional actions to provide up to $2.3 trillion in loans to support the economy (April 9, 2020)

Public Comments Received on MSNLF and MSELF Term Sheets (April 9, 2020 – April 30, 2020)

• Public comments 1 (PDF)
• Public comments 2 (PDF)
• Public comments 3 (PDF)
• Public comments 4 (PDF)
• Public comments 5 (PDF)
• Public comments 6 (PDF)
• Public comments 7 (PDF)
• Public comments 8 (PDF)
• Public comments 9 (PDF)

Contact

For general inquiries regarding the Main Street Lending Program please email: mslp@bos.frb.org