Fed expands Main Street lending program to include nonprofits
Central bank previously indicated it was looking to expand the $600B loan program
The Federal Reserve announced Friday that it will formally expand its Main Street lending program to include nonprofit organizations disrupted by the coronavirus pandemic.
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"Nonprofits provide vital services across the country and employ millions of Americans," Federal Reserve Chairman 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."
The Fed had previously indicated it was looking to expand the $600 billion loan program, designed to help small- and mid-sized businesses, to include nonprofits, hospitals, educational institutions and other social service organizations.
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The central bank also changed the minimum employee provision for nonprofits to 10 from 50, allowing smaller groups to participate.
Organizations that were on sound financial footing pre-crisis and only damaged by the outbreak of the virus can tap the program.
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The $2.2. CARES Act signed into law at the end of March provided $454 billion for the Treasury to backstop the various lending programs offered by the Fed.
The program -- one of the Fed's most "challenging," according to Powell -- opened for lender registration in June and began processing loans last week. On Thursday, the central bank said it had purchased $12 million in loans so far.