The Federal Reserve is giving support lending to small and medium-sized businesses that were in sound financial condition before the onset of the COVID-19 pandemic
The Federal Reserve has announced that it is establishing a Main Street Lending Program (Program) to support lending to small and medium-sized businesses that were in sound financial condition before the onset of the COVID-19 pandemic. 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). Term sheets for each facility and Frequently Asked Questions (FAQs) providing more information regarding eligibility and conditions can be found below.
- Structure. To implement the Program, the Federal Reserve Bank of Boston will set up a special purpose vehicle (SPV) to purchase participations in loans originated by eligible lenders. Lenders will retain a percentage of the loans. As detailed further in the term sheets, U.S. businesses may be eligible for loans if they meet either of the following conditions: (1) the business has 15,000 employees or fewer; or (2) the business had 2019 revenues of $5 billion or less. Loans issued under the Program would have a four year maturity, and principal and interest payments on the loans will be deferred for one year. Eligible lenders may originate new loans (under MSNLF and MSPLF) or increase the size of (or “upsize”) existing loans (under MSELF) made to eligible businesses.
- Operational Status. The Federal Reserve is currently working to create the infrastructure necessary to operationalize the Program. More information will be posted here as it becomes available regarding Program terms and how eligible lenders can sell eligible loan participations to the SPV. Once the Program is operational, small and medium-sized businesses interested in the Program should seek to apply for Program loans from an eligible lender.
Main Street New Loan Facility (MSNLF)
Main Street Priority Loan Facility (MSPLF)
Main Street Expanded Loan Facility (MSELF)
Main Street Lending Program Frequently Asked Questions (FAQs)