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.
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