Here's why:
* Noun clauses function as nouns within a sentence. They can act as the subject, object, or complement of a verb.
* In this sentence, the noun clause "whomever needs it" is the object of the verb "loan". The entire sentence is essentially saying: "Mrs. Smith will loan *that person* money for lunch" (where "that person" refers to whoever needs it).
Let me know if you'd like to explore more examples of noun clauses!