(Editor's Note: All information included herein is as of June 9, 2020.)
This is a follow up to our original newsletter on the Main Street Lending Program (MSLP) on April 22, 2020.
The Federal Reserve Board announced revisions to the MSLP on Monday. The changes are geared to make the program more accessible to small and midsize businesses.
Significant changes to the program include:
Lowering the minimum loan size to $250,000 from $500,000.
Increasing the maximum loan size. Amounts vary depending on which vehicle within the program is selected.
Increasing the term of each loan option to five years from four years.
Extending the repayment period for all loans by delaying principal payments for two years, rather than one.
The Main Street program supports companies with less than 15,000 employees and less than $5.0 billion in 2019 revenue that were in good financial standing before the COVID-19 crisis. The program fills the need for funding companies that are too large for the Paycheck Protection Program (PPP), but receiving a PPP loan or Economic Injury Disaster Loan (EIDL) does not preclude a company from receiving a MSLP loan.
The program is not currently operational but is expected to be soon. A list of Frequently Asked Questions on the program can be found here. A summary of the three different facilities within the MSLP can be found here.
If you are interested in obtaining financing through the MSLP, we recommend letting your lender know soon. If we can assist you in explaining the programs' provisions, analyzing the potential benefits or helping you with gathering the needed information, please call any Sponsel CPA Group Team member or our colleagues listed below.
This communication is intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.