Expansion of the Main Street Lending Program
The Federal Reserve Board announced on Thursday, April 30, 2020 that it is expanding the scope and eligibility of the Main Street Lending Program. We point you to our previous eblast on April 13 found
here that lays out the foundational points about the Main Street Lending Program. The key changes just announced are:
- A third loan option has been created, called Priority Loans, which includes increased risk sharing by lenders for borrowers with greater leverage;
- The minimum loan size has been lowered to $500,000 for New Loans as well as for the new Priority Loans. Expanded Loans continue to maintain a $1,000,000 minimum loan size; and
- The pool of businesses eligible to borrow has been expanded based on the following criteria:
- The previous 10,000 employee limit has been raised to include those businesses with up to 15,000 employees; and
- The annual revenue threshold has been increased from $2.5 billion to $5 billion.
All three loan types carry four-year loan repayment windows, though the exact repayment terms vary based on the particular loan. All loans have an automatic one-year deferral of interest and principal payments.
The Federal Reserve has a plethora of information on their Main Street Lending website, here:
https://www.federalreserve.gov/monetarypolicy/mainstreetlending.htm, including an expansive FAQ list as well as specific details about each of the three loan options. Banks continue to be the primary avenue for procuring a Main Street loan, so you will need to speak with your lender directly to obtain one of these loans.
As always, we are happy to answer any questions you may have.
