Main Street Lending Program
The Main Street Lending Program (MSLP) is a new offering created by the Federal Reserve to support small and medium-sized companies and their employees impacted by the COVID-19 pandemic and accompanying economic disruption. Unlike the Small Business Administration’s (SBA) Paycheck Protection Program (PPP), directed at smaller businesses, the Main Street Lending Program will be the first federal relief program also aimed at larger companies.
Please note, this Program is not connected to the SBA. Companies that have already applied for the SBA’s PPP are also eligible for loans through the Main Street Lending Program.
For the Main Street Lending Program details and information regarding eligibility and conditions, please refer to the Federal Reserve’s MSLP webpage, which includes detailed term sheets and FAQs that are updated regularly, and the Federal Reserve Bank of Boston MSLP webpage for current Program updates.
For a high-level summary of the MSLP, please refer to the Main Street Lending Program Guide prepared by the U.S. Chamber of Commerce, HERE.
Please refer to the Federal Reserve's webpage, listed above, for full program details, including eligibility. The following are a few of the primary MSLP eligibility requirements:
(1) The Business [borrower] must have been established prior to March 13, 2020.
(2) The Business [borrower] must meet at least one of the following two conditions: (a) the Business has 15,000 employees or fewer, or (b) the Business has 2019 annual revenues of $5 billion or less. Businesses must meet at least one of these conditions but are not required to meet both.
(3) The Business [borrower] must be a U.S. Business. Eligible Borrowers must be Businesses that were created or organized in the United States or under the laws of the United States with significant operations in and a majority of their employees based in the United States.
(4) The Business [borrower] may only participate in one of the Main Street facilities (MSNLF, MSPLF, or MSELF) and must not also participate in the Primary Market Corporate Credit Facility.
(5) The Business [borrower] must not have received specific support pursuant to the Coronavirus Economic Stabilization Act of 2020 (Subtitle A of Title IV of the CARES Act). A Business is not eligible if it has received support pursuant to section 4003(b)(1)-(3) of the CARES Act.
The restrictions on repaying debt vary across the various Main Street loans. Please refer to the Federal Reserve's FAQ list on their webpage, listed above, for full restrictions.
Eligible Borrowers cannot use the loan proceeds to repay other loan balances or other debt of equal or lower priority, with the exception of mandatory principal payments, unless the borrower has first repaid the loan in full. The proceeds of a Main Street loan may not be used for the benefit of an Eligible Borrower’s foreign parents, affiliates, or subsidiaries.
The Program will operate through three facilities: the Main Street New Loan Facility (MSNLF), the Main Street Priority Loan Facility (MSPLF), and the Main Street Expanded Loan Facility (MSELF).
The amount of the secured or unsecured loan can be a minimum of $500,000 and a maximum of an amount equal the lesser of the following amounts, based on the particular loan facility:
(1) Main Street New Loan Facility (MSNLF): $35 million or an amount that, when added to the borrower’s existing outstanding and committed but undrawn debt, does not exceed four times the borrower’s 2019 EBITDA.
(2) Main Street Priority Loan Facility (MSPLF): $50 million or an amount that, when added to the borrower’s existing outstanding and committed but undrawn debt, does not exceed six times the borrower’s 2019 EBITDA.
(3) Main Street Expanded Loan Facility (MSELF): $200 million, 35% of the borrower’s existing outstanding and committed but undrawn bank debt that is pari passu in priority with the Expanded Loan Facility loan and equivalent in secured status, or an amount that, when added to the borrower’s existing debt, does not exceed six times the borrower’s 2019 EBITDA.
Apply for a Main Street Lending Program Loan
If you are interested in our assistance with a Main Street Lending Program loan, please contact Jordan Senor at firstname.lastname@example.org.
This information was obtained from the Federal Reserve and the U.S. Chamber of Commerce. All the above information is subject to change, per the Federal Reserve and the U.S. Treasury Department guidelines. Affiliated Bank does not have any influence over the direction of the Main Street Loan proceedings.