Main Street Lending Program: What You Need to Know

The Main Street Lending Program (Program) was established by the Federal Reserve to support lending to small and medium-sized businesses impacted by the COVID-19 pandemic.  The Program operates through three facilities:

1. 1. the Main Street New Loan Facility (MSNLF),
   2. the Main Street Priority Loan Facility (MSPLF), and
   3. the Main Street Expanded Loan Facility (MSELF)

U.S. businesses (non-profit organizations are NOT eligible to participate) are eligible for Program loans if they meet either of the following conditions:

1. 1. The business has 15,000 employees or fewer; or
   2. The business had 2019 revenues of $5 billion or less.

Loans issued under the Program will have a five-year maturity, and principal and interest payments on the loans will be deferred for two years.  The interest rate charged is LIBOR (1 or 3 month) + 300 basis points.

Minimum loan sizes are $250,000 for MSNLF and MSPLF and $10 million for MSELF.

How do eligible borrowers apply?

Eligible and interested businesses can apply for the Program by contacting an eligible lender.  You should contact the bank you already do your banking with and ask if they will be participating in these loans.  The Program is not up and running (operational) yet but if you are interested start having the conversation with your bank now.

Are they forgivable?

No, Program loans are full-recourse loans and not forgivable.

How long will the Program be in effect?

Till September 30, 2020 unless the Program is extended.

Can you apply even when you received a Paycheck Protection Program (PPP) Loan?

Yes, the Program is designed to support eligible businesses that were unable to access the PPP or that require additional financial support.

What information will the Federal Reserve disclose regarding the Program?

The Federal Reserve will disclose information including names of lenders and borrowers, amounts borrowed and interest rates charged, and overall costs, revenues and other fees during operation of the program and one year after the effective date of the termination of the Program.

Are there financial reporting or covenant requirements?

Borrowers must include quarterly and annual financial reporting covenants as detailed in Appendix C of the FAQs of the Program.

How can I receive updates regarding changes to the Program?

Click here for more information       Sign Up for Federal Reserve Bank of Boston Alerts

If you need any help or assistance with understanding the Program and if you should apply please contact your HW&Co. advisor.