Read Manning Fulton’s Updated Response to the Coronavirus (COVID-19) - June 25, 2020

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The Federal Reserve Board (the “Fed”) recently updated its Main Street Lending Program (the “Program”) to make it more accessible to a greater number of small and medium-sized businesses. The Program is designed to provide capital to struggling businesses so that they can retain workers and fund operations. The Program operates through three separate but related facilities: the Main Street New Loan Facility (“MSNLF”); the Main Street Priority Loan Facility (“MSPLF”); and the Main Street Expanded Loan Facility (“MSELF”). All three facilities use the same lender and borrower criteria and contain many of the same terms but differ slightly on minimum and maximum loan amounts and how they treat a borrower’s existing outstanding debt.

Changes to the Program include lower minimum loan amounts, raised maximum loan limits, an adjusted principal repayment schedule beginning after two years, and a term extension to five years. The Fed has opened the program for lender registration and is now asking lenders to start making program loans immediately. Lenders can find the necessary registration documents on the program site.

Specific Program updates include:

  • Lowering the minimum loan size for MSNLF loans and MSPLF to $250,000 from $500,000;
  • Increasing the maximum loan size for MSELF from $200 million to $300 million;
  • Increasing the term of each loan option from four years to five years; and
  • Extending the repayment period for all loans by delaying principal payments for two years instead of the previous one year.

Additionally, the Fed will take on more risk by increasing the portion of certain Program loans it buys from 85% to 95% of each eligible loan that is submitted to the program.

Manning Fulton’s Corporate team continues to monitor the Main Street Lending Program as it continues to evolve and stands ready to assist you and your business. If you have any questions or the Firm can be of assistance in any way, please contact Joe Fields or your Manning Fulton relationship attorney.

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