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The Federal Reserve Expands the Main Street Lending Program

May 4, 2020

In response to public input, the Federal Reserve Board is expanding the scope and eligibility of the Main Street Lending Program. Changes to the original program include:

Expanding the number of businesses eligible for the program

Businesses with up to 15,000 employees or up to $5 billion in annual revenue are now eligible. Previously, it was limited to companies with 10,000 employees and $2.5 million in revenue. Additionally, the minimum loan size for two of the options was lowered from $1 million to $500,000.

A third loan option for borrowers with greater leverage

In addition to New Loans and Expanded Loans, the update adds a third category: Priority Loans. Under the new option, lenders retain a 15% share on loans that when added to existing debt do not exceed six times a borrower’s income, adjusted for interest payments, taxes, depreciation, and other appropriate adjustments.

The Fed’s April 30 press release includes a table to make it easy to compare the three loan options. A start date for the program is yet to be announced.

For these and other business updates, visit our COVID-19 Business Updates page or subscribe to receive email communications. Our advisors are here to help if you want to discuss your unique situation.

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