On June 15, 2020, the SBA announced that the Main Street Lending Program portal is now open.  The Main Street Program provides additional funding to small and mid-size businesses, and Not-for-Profit Organizations, with relaxed regulations, as part of the CARES Act.

On July 17th, the Federal Reserve Board has approved two new loan options, which will provide 501(c)(3) organizations or 501(c)(19) organizations greater access to available credit.  The organizations that will benefit by this modification are educational institutions, hospitals, and social service organizations.

The following modifications were made to the Main Street Lending Program, which now will allow more organizations to qualify for the loans:

  • The organization must have a minimum of 10 employees. Under the original requirements, the loans were only available to Organizations with a minimum of 50 employees.
  • The organizations must have revenue equal to or greater than 60% of expenses, for the years 2017 through 2019. However, the revenue used in the calculation can only be from sources other than donations.  Under the original requirements the organizations had to have non-donation revenue equal to or greater than 70% of expenses.
  • The organizations must have an operating margin of 2% or greater. Under the original requirements, the Organizations were required to have a 5% or greater operating margin.
  • In order to show that the Organizations have the ability to repay the loans, their ratio of cash, investments and other available resources, as compared to their outstanding debt, has to be greater than 55% Under the original requirements, the ratio had to be greater than 65%
  • The repayment terms are the same as the Main Street Lending Program Loans that are offered to for-profit businesses, in that the loan will be a 5 year term loan with no principal payments due during the first 2 years of the loan. In years 3 and 4, 15% of the principal amount of the loan must be repaid each year.  A balloon payment of 70% of the loan will be due at the end of year 5.  The interest rate will be at LIBOR plus 300 basis points.
  • The Organization must have been in business for at least 5 years and have an endowment cap of less than $3 billion. The minimum loan amount is $250,000.  These requirements have not been modified from the original requirements.
  • The loans will be available until September 30, 2020.

At BKC, our experienced professionals are available to help businesses navigate through the available options and compliance reporting.  For more information, please contact us at (908) 782-7900 or visit for more helpful information.