Responding to the needs of U.S. businesses amid the evolving coronavirus (COVID-19) pandemic, the Federal Reserve Board announced details on April 9 regarding the Main Street Lending Program, which will deliver four-year loans with deferred principal and interest payments to small- and mid-size businesses with up to 10,000 employees and/or less than $2.5 billion in revenue.
While the Small Business Administration’s Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) Program are geared toward smaller businesses, the Main Street Lending Program includes larger firms needing assistance within its target sphere. Interested businesses can apply for a Main Street Lending Program loan even if they also have applied for a loan under the PPP. However, they cannot apply if they currently participate in other programs such as the Main Street Expanded Loan Facility (MSELF) or the Primary Market Corporate Credit Facility. Following the release of term sheets and the April 9 press release, the Federal Reserve sought comments from the business community of potential issues with the program. That comment period closed on April 17, and the Federal Reserve is in the process of vetting those comments out.
U.S. business with up to 10,000 employees or less than $2.5 billion in revenue in 2019
About the 4-year loans
Minimum size is $1 million
Where, how, and when can you apply?
U.S. insured depository institutions, U.S. bank holding companies, and U.S. savings and loan holding companies are eligible to be lenders
As mentioned above, the Federal Reserve is working through a host of comments about the program, and we anticipate further guidance will follow. In the interim, we recommend business owners begin conversations now with their current lender or financial institution about this loan program. If the funds are allocated as quickly as those from the PPP, small- and mid-sized companies that are not proactive and already applying may be left in the cold.
Do you have questions about the Main Street Lending Program, or other tax matters? Please contact us today and let us help get your company on the right path.
LGT's Profit Sense
Financial Tips from Your Trusted Advisor
Keeping you up to date with: