Main Street Lending Program
As part of the CARES Act, the U.S. Treasury Department and the Federal Reserve Board have established the Main Street Lending Program to facilitate lending to small and medium-sized businesses that were in sound financial condition before the start of the COVID-19 pandemic. The Program offers three different loan options to businesses employing up to 15,000 workers or with 2019 annual revenues of less than $5 billion. Unlike the Paycheck Protection Program, the Main Street loans are full-recourse and are not forgivable. [read more]
July 8, 2020
The Federal Reserve Bank of Boston on Wednesday published a state-by-state listing of lenders participating in the Main Street Lending Program who are currently accepting applications from new business customers, and also elect to be listed. Interested borrowers can access the lender listing on the program website. [read more]
July 6, 2020
The Federal Reserve Bank of Boston announced today that the Main Street Lending Program is now fully operational, ready to purchase participations in eligible loans that are submitted to the program by registered lenders. The Federal Reserve encourages lenders to begin submitting qualifying loans. [read more]
Main Street Lending Program Options
The Main Street Lending Program offers three different secured or unsecured five-year term loan options set at an adjustable rate of LIBOR (1 or 3 month) plus 300 basis points with principal and interest payments deferred for one year for eligible borrowers. All loans are made by private financial institutions but backed by the Federal Reserve.
On Monday, June 8, 2020, the Federal Reserve Board expanded the Main Street Lending Program to allow more small and medium-sized businesses to be able to receive support. The changes include:
- Lowering the minimum loan size for certain loans to $250,000 from $500,000;
- Increasing the maximum loan size for all facilities;
- 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; and
- Raising the Reserve Bank’s participation to 95% for all loans.
The chart below has additional details on the changes.
Term Sheets (as of June 8, 2020)
See below for additional resources related to the Main Street Lending Program, including forms and agreements, frequently asked questions and the latest press releases from the Federal Reserve.
The necessary legal forms and agreements (and instructions for completing the required documents) for eligible borrowers and eligible lenders to participate in the MSNLF, MSELF, or MSPLF can be found on the Federal Reserve Bank of Boston’s Main Street Lending Program Forms and Agreements website here.
The Federal Reserve Bank of Boston has published a state-by-state listing of lenders participating in the Main Street Lending Program who are currently accepting applications from new business customers, and also elect to be listed. Interested borrowers can access the lender listing on the program website.
The FAQs are intended to address frequently asked questions about the Main Street Lending Program, including the MSNLF, MSPLF, and MSELF. The Federal Reserve will periodically update these FAQs. Please check the website of the Federal Reserve Bank of Boston for new FAQs or revisions to previously issued FAQs.
» Frequently Asked Questions (as of June 26, 2020)
PROPOSED Main Street Lending Program Options for Nonprofit Organizations
On June 15, 2020, The Federal Reserve Board announced it will be seeking public feedback on a proposal to expand its Main Street Lending Program to provide access to credit for nonprofit organizations. The proposed expansion would offer loans to small and medium-sized nonprofits that were in sound financial condition before the coronavirus (COVID-19) pandemic and could benefit from additional liquidity to manage through this challenging period.
Loan terms under the proposed Main Street nonprofit loans, including the interest rate, deferral of principal and interest payments, and five-year term, are the same as for Main Street business loans. The minimum loan size is $250,000 while the maximum loan size is $300 million. Principal payments would be fully deferred for the first two years of the loan, and interest payments would be deferred for one year. Two loan options would be offered under the proposal. Borrower eligibility requirements for the proposed nonprofit facilities would be modified from the for-profit facilities to reflect the operational and accounting practices of the nonprofit sector and include:
- Minimum of 50 and maximum of 15,000 employees;
- Financial thresholds based on operating performance, liquidity, and ability to repay debt;
- An operational history of at least five years; and
- A limit on endowments of no more than $3 billion.
Additionally, each organization must be a tax-exempt organization under section 501(c)(3) or 501(c)(19) of the Internal Revenue Code. The chart below has additional details on the proposed terms.
Because the circumstances, structure, and needs of nonprofit organizations vary widely, public feedback is being sought to help make the proposed program as efficient and effective as possible.
PROPOSED Nonprofit Organization Term Sheets (as of June 15, 2020)
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