Federal Reserve Board modifies Main Street Lending Program for nonprofit organizations

The Federal Reserve Board today modified the Main Street Lending Program to provide a new borrowing option for nonprofit organizations including hospitals, a move advocated for by the AHA. The expanded program offers loans to small- and medium-sized nonprofits that were in sound financial condition before the COVID-19 pandemic and could benefit from additional liquidity to manage during the current pandemic. The AHA has made a series of recommendations to the Federal Reserve focused on increasing the possibility that all hospitals can make use of the Main Street Program. Among other changes from the original proposal, the modified program requires nonprofit borrowers to have a profit margin in 2019 of 2% or more (down from the proposed 5%), and reduces proposed liquidity and debt-to-cash requirements.