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The Federal Reserve Board ("FRB") revised its Main Street Lending Program (composed of the Main Street New Loan Facility, Main Street Expanded Loan Facility and Main Street Priority Loan Facility) to expand the scope of small- and medium-sized businesses eligible to borrow under the program.
As previously covered, the Main Street Lending Program is intended to facilitate the implementation of the Small Business Administration's Paycheck Protection Program. Based on comments received since first implementing the Main Street Lending Program, the FRB made several updates, such as:
- providing a third loan option that increases risk-sharing and allows lenders to retain a 15 percent share on eligible loans, an increase from the original five percent;
- decreasing the minimum loan size for certain loan options under the program from $1 million to $500,000; and
- expanding borrower eligibility by including businesses with up to 15,000 employees or with a maximum of $5 billion in 2019 total annual revenues, compared to initially only allowing businesses with up to 10,000 employees or a maximum of $2.5 billion in revenue.
The FRB also noted that it intends to establish a separate program to support nonprofit organizations.
Primary Sources
- FRB Press Release: Federal Reserve Board announces it is expanding the scope and eligibility for the Main Street Lending Program
- FRB Term Sheet: Main Street Expanded Loan Facility
- FRB Term Sheet: Main Street Priority Loan Facility
- FRB Term Sheet: Main Street New Loan Facility
- Main Street Lending Program FAQs
Originally published April 30, 2020
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