During this difficult time, DGC provides you with updates and resources here.
Companies with fewer than 500 employees have until August 8 to apply for the remaining $130 billion available under the Paycheck Protection Program (“PPP”). An alternative funding option for those companies, and for larger companies that were not eligible for PPP Loans, is now available through the Federal Reserve’s Main Street Lending Program, which runs through December 31, 2020.
The Main Street Lending Program (“Main Street”) was established by the Federal Reserve to support lending to small and medium-sized businesses that were in sound financial condition before the COVID-19 pandemic. Over the past several months, it has been modified and expanded to allow more businesses access to financial support and repayment flexibility. Most recently, it was expanded to include nonprofit organizations such as educational institutions, hospitals, and social services.
Main Street is administered through five credit facilities:
• New Loan
• Priority Loan
• Expanded Loan
• Nonprofit Organization New Loan
• Nonprofit Organization Expanded Loan
It is more inclusive than the PPP, increasing the maximum number of employees and loosening restrictions on the use of funds. However, it does not offer forgiveness, which is the PPP’s most attractive feature.
Eligibility differs between for-profit businesses and nonprofit organizations.
For-profit business eligibility includes:
• Establishment of the business prior to March 13, 2020, under the laws of the United States
• Significant operations and most employees based in the United States
• Up to 15,000 employees, or less than $5 billion in revenue for 2019
• Participation in only one of the Main Street facilities
• Have not received certain support pursuant to the Coronavirus Economic Stabilization Act of 2020
• Is not an “ineligible business” as defined by 13 CFR 120.110(b)-(j) and (m)-(s), as modified by section 1102 of the CARES Act
Nonprofit organization eligibility is more stringent and includes requirements that the organization has been in continuous operation since January 1, 2015, has at least 10 employees, and meets several financial ratios.
Source: Federal Reserve System | Main Street Lending Program | bostonfed.org/mslp
We will post updates as we receive more information from the Federal Reserve on program implementation. More program information, required documents, and FAQs are available on the Main Street Lending Program website.
If you want to discuss how the Main Street Lending Program can help you manage the impact of COVID-19, contact a member of your client service team or Eric Bookbinder, CPA at 781-937-5134 / firstname.lastname@example.org, Jackie Reinhard, CPA at 781-937-5721 / email@example.com or Nicholas Tamvaklis, CPA, MST at 781-937-5147 / firstname.lastname@example.org. You can also visit DGC's coronavirus web page at dgccpa.com/coronavirus which is frequently updated with new resources to help you deal with the financial impact of the coronavirus on you and your business.
If you would like to get alerts and insights like this sent directly to your inbox, sign up here.