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Main Street Lending Program

On April 10th, 2020, The Federal Reserve announced the launching of a $600 billion lending program to help small- and medium-sized businesses deal with the economic shock caused by the coronavirus pandemic.

Term sheets for the MSNLF and the MSELF can be found on the Steuben County IDA web site, and more information can be found on the Federal Reserve website. The Federal Reserve is soliciting feedback on the programs until April 16th. As a result, the application process and guidelines are not expected until at least the week of April 20-24.

 

This new Main Street Lending Program offers four-year loans to businesses that meet specific criteria and were in good financial standing before the coronavirus crisis hit. Businesses that have taken advantage of the Small Business Administration's Paycheck Protection Program may also take out loans under this new program. Principal and interest payments under this new program will be deferred for one year.

 

The Department of the Treasury will provide $75 billion in equity to the lending facility, using funding from the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Businesses seeking these loans must commit to making reasonable efforts to maintain payroll and retain workers. Borrowers are also required to follow compensation, stock repurchase and dividend restrictions that apply to direct loan programs under the CARES Act (more information below).

 

Eligible borrowers for the Main Street Lending Program are businesses that meet the following criteria:

Steuben County IDA COVID-19 April 13, 5:00pm UPDATE:

The Federal Reserve released details on the $600 billion Main Street Lending Program last week which is intended to support small and mid-sized businesses by offering four-year loans to companies employing up to 10,000 workers or with revenues of less than $2.5 billion. Two separate loan programs were created - the Main Street New Loan Facility (MSNLF) and the Main Street Expanded Loan Facility (MSELF). Some program highlights include:

  • Principal and interest payments will be deferred for one year.

  • Eligible banks may originate new Main Street loans or use Main Street loans to increase the size of existing loans to businesses.

  • Firms that have taken advantage of the Paycheck Protection Program may also take out Main Street loans.

  • The minimum loan amount for both programs is $1 million and the maximum loan amount is $25 million for the MSNLF and $150 million for the MSELF.

 

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