This article was originally published on April 14 and was updated on May 1.
On April 30th, the Federal Reserve expanded the scope and broadened eligibility criteria for its $600 billion Main Street Lending Program, which is administered through three credit facilities: The Main Street New Loan Facility, the Main Street Priority Loan Facility and the Main Street Expanded Loan Facility. This program is meant to provide financing through private financial institutions for small and mid-sized companies with up to 15,000 employees, and less than $5 billion in revenue for 2019 as compared to the original thresholds of 10,000 employees and $2.5 billion in revenue. This program is more inclusive than the Paycheck Protection Program, increasing the maximum number of employees a business may have from 500 to 15,000. However, there is no forgiveness provision associated with the Main Street Lending Program.
The terms of the first loan option, or New Loan Facility, as released on April 30th are as follows:
Who is eligible?
What are the terms?
What is required to apply?
Businesses that participate in the Paycheck Protection Program are also eligible to apply for a loan under the Main Street Lending Program, assuming they meet the eligibility requirements and other terms. These program changes will allow a wider set of eligible small and medium-size businesses to apply for the loans. The Federal Reserve Board stated that it is evaluating a separate approach to meet their unique needs of nonprofit organizations as well.
To view a chart summarizing the terms of the loans under the three credit facilities, click here.
Stay tuned for updates as we receive more information from the Treasury Department on program implementation in the coming weeks.
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