This blog post was last updated on May 4, 2020.
On Thursday, April 30, 2020, the Federal Reserve announced that they had expanded their Main Street Lending Program. The Program's minimum loan size was reduced from $1 million to $500,000. In addition, it will now be open to companies with up to 15,000 employees, or up to $5 billion in annual revenue. Below is a chart from the Federal Reserve which outlines the differences between the Main Street Lending Program options.
Main Street Lending Program Loan Options |
New Loans |
Priority Loans |
Expanded Loans |
Term |
4 years |
4 years |
4 years |
Minimum Loan Size |
$500,000 |
$500,000 |
$10,000,000 |
Maximum Loan Size* |
The lesser of $25M or an amount that, when added to outstanding and undrawn available debt, does not exceed 4.0x adjusted 2019 EBITDA |
The lesser of $25M or an amount that, when added to outstanding and undrawn available debt, does not exceed 6.0x adjusted 2019 EBITDA |
The lesser of $200M, 35% of existing outstanding and undrawn available debt, or an amount that, when added to outstanding and undrawn available debt, does not exceed 6.0x adjusted 2019 EBITDA |
Risk Retention |
5% |
15% |
5% |
Payment (year one deferred for all) |
Years 2-4: 33.33% each year |
Years 2-4: 15%, 15%, 70% |
Years 2-4: 15%, 15%, 70% |
Rate |
LIBOR + 3% |
LIBOR + 3% |
LIBOR + 3% |
The Federal Reserve established the Main Street Lending 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 loan program is part of the CARES Act and is intended for small and medium-sized businesses who were unable to access a PPP loan or require additional financial support after receiving a PPP loan. Although applications are not being accepted yet, the Federal Reserve said that they would soon announce a start date for the program.
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