The AAMC joined the higher education community in comments to the Federal Reserve (the Fed) on June 22 about their proposal to expand the Main Street Lending Program to 501(c)(3) and 501(c)(19) nonprofits.
Medical schools, academic medical centers, and faculty physician practices that meet the outlined requirements and are looking for increased cash flow could use this proposed loan program to access affordable capital.
The comments highlight how “academic medical centers and their associated faculty physician practices on the front lines of treating COVID-19 patients have lost significant revenue by halting elective procedures and non-urgent patient care visits during the pandemic.”
The Nonprofit Organization New Loan Facility and Nonprofit Organization Expanded Loan Facility programs proposed by the Fed would provide a minimum loan of $250,000 and a maximum loan of $300 million. The loans will be eligible for entities that:
- Have up to 15,000 employees or less than $5 billion in 2019 revenue.
- Have an endowment of less than $3 billion.
- Have been established before Jan. 1, 2015.
- Meet financial thresholds based on operating performance, liquidity, and ability to repay debt.
While supportive of the program, the comments advocate for allowing universities, their affiliated hospitals, and physician practices to apply for funding separately; eliminating the 15,000-employee cap for nonprofits; and removing the endowment cap clause.