Where and How to Find Money for your Nonprofit Organization During Covid-19
On Friday, July 18th, the Federal Reserve has announced that it has extended the Main Street Lending Program to nonprofit organizations.
“ Nonprofits provide vital services across the country and employ millions of Americans. We have listened carefully and adapted our approach so that we support them in carrying out their vital mission during this extraordinary time.”— Jerome Powell, Federal Reserve Chairman
The Main Street Lending Program (MSLP) is a $600 billion program announced by the Federal Reserve on April 9th, 2020. The MSLP was put in place to help small to medium-sized businesses that may have not qualified for the Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law on March 27th, 2020.
The nonprofits bring an essential contribution to the lives of Americans across the nation. The Federal Reserve Chairman Jerome Powell said that "Nonprofits provide vital services across the country and employ millions of Americans. We have listened carefully and adapted our approach so that we support them in carrying out their vital mission during this extraordinary time."
The terms for nonprofit organizations are not that different compared to the terms of for-profit businesses. The interest rate, the five-year term, the principal and interest payment deferral, and the range for loan sizes are similar. With interest payment that can be deferred for one year, $300 million is the maximum a qualified nonprofit organization can barrow.
Here are a few conditions to qualify for the loan. Previously, one of the eligibility criteria required a minimum of 50 employees for a nonprofit to be eligible for the loan. With the new changes, the minimum number of employees has Cbeen reduced to only ten employees. Nonprofit organizations need to show that Covid-19 has significantly impacted them, and they are in grave financial hardship. Nonprofits also need to show that they were in good financial standing before the pandemic.
It is crucial to mention that MSLP is a loan, not a grant. Unlike the PPP, there is no provision to forgive the repayment of the loan.
