Washington — House Speaker Nancy Pelosi is urging her Democractic colleagues to ensure nonprofits, universities and minority-serving institutions have access to new lending opportunities through the $2.2 trillion legislative package that provides financial assistance to struggling small businesses because of the coronavirus pandemic.
In a letter to members of the Democratic caucus Tuesday, Pelosi said a lending facility announced by the Federal Reserve last week, which was authorized by the economic relief package, leaves out nonprofit organizations and higher-learning institutions. The lending program is designed to boost support for small and medium-sized businesses and allows eligible banks to extend new loans of between $1 million and $25 million or expand existing business loans.
"Unfortunately, the administration and the Fed, as of today, are excluding nonprofits, many institutions of higher learning and minority-serving institutions," Pelosi wrote in her letter. "This is a significant blow in particular to entities that are also ineligible for the Paycheck Protection Program."
Pelosi told Democrats they should encourage nonprofits and universities to contact the Federal Reserve to ensure they have access to the lending options.
Nonprofit organizations, many of which continue to provide services to their local communities during the coronavirus crisis, are warning they may not have the reserves needed to keep their doors open for many more months. While the economic relief bill passed by Congress last month provides loans to small businesses if they keep employees on the payroll, larger organizations with more than 500 employees said they do not qualify for the funding.
The groups are encouraging lawmakers to allocate aid specifically for nonprofits in a fourth coronavirus relief package, which Democrats are currently crafting.
The Senate, meanwhile, is considering an emergency package that would provide an additional $250 billion for small businesses through the Small Business Administration's Paycheck Protection Program. But Democrats want the measure to include more money for hospitals and state and local governments, and increase food assistance. Efforts to pass the emergency legislation have stalled after Senate Democrats held up a request by Senate Majority Leader Mitch McConnell to approve the measure by unanimous consent.
"We cannot accept Leader McConnell's proposals that would only perpetuate the flaws that are threatening the survival of the most vulnerable small businesses and would do nothing to aid desperate hospitals and state and local governments," Pelosi told Democrats in her letter.