Home Health & Hospice Week

You may qualify for Main Street lending if you have PPP loans, but not Provider Relief Funds.

If you’re a nonprofit organization that hasn’t received CARES Act Provider Relief Funds, you may be eligible for another source of COVID-19 relief funding.

The Federal Reserve started releasing “Main Street” loan information for businesses in April, but now it has announced two programs for nonprofits through the Nonprofit Organi­zation New Loan Facility (NONLF) and the Nonprofit Organization Expanded Loan Facility (NOELF).

“Many of the loan terms are similar to the business-focused programs with modified eligibility requirements,” observes Anna Coughlin with BKD in online analysis. Nonprofits “that have received Paycheck Protection Program (PPP) loans are eligible for Main Street loans, if all other program requirements are met,” she points out.

“Borrowers must certify that they have a reasonable basis to believe that, as of the date of origination of the loan, and after giving effect to the loan, it has the ability to meet its financial obligations for at least the next 90 days and does not expect to file for bankruptcy during that period,” highlights attorney Joseph Wang with Sherrin and Lodgen in online analysis.

One requirement: Under the loan, no officer or employee with total compensation greater than $425,000 in 2019 may receive total compensation during any consecutive 12 month period in excess of their 2019 compensation, point out attorneys with law firm Polsinelli in California, in online analysis. That includes severance or other termination benefits in excess of two times their 2019 total compensation.

Another requirement: A nonprofit borrower must have at least 50 employees but fewer than 15,000, and 2019 annual revenues of $5 billion or less, says law firm McGuireWoods on its website.

Do this: The nonprofit facilities are not yet operational and the Fed took comments on them until June 22, Wang  says. “Potentially eligible borrowers should study the loans carefully, and may wish to examine the for-profit rules for possible guidance,” he offers.

Note: The Fed’s Main Street lending website, including links to draft term sheets and frequently asked questions, is at www.federalreserve.gov/monetarypolicy/mainstreetlending.htm.