The Federal Reserve Board ("FRB") expanded 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 allow more small- and medium-sized businesses to receive support from the program.
The Main Street Lending Program was established to implement the Small Business Administration's Paycheck Protection Program (see previous coverage). Under the expansion, the FRB will:
- reduce the minimum loan size for certain loans to $250,000, down from $500,000;
- raise the maximum size of all loans;
- extend the potential term of a loan under any program from four years to five years;
- defer principal payments on loans for two years, up from one, and extend the repayment period for one year; and
- increase the FRB's participation to 95 percent for all loans.
The FRB noted that the Main Street Lending Program will accept loans from the previously announced terms if they were funded prior to June 10, 2020 (see previous coverage).
Additionally, the FRB stated that it is still working to establish a similar program for nonprofit organizations.
Originally published June 09, 2020.
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