Federal Reserve’s Main Street Lending Program Coming Soon

Federal Reserve’s Main Street Lending Program Coming SoonSmall and medium-sized businesses will soon be able to apply for a loan through the Federal Reserve’s new lending program called the Main Street Lending Program as a part of the Coronavirus Aid, Relief & Economic Security (CARES) Act. This lending program will provide $600 billion in financing to businesses in need of an extra assistance while navigating the effects of the COVID-19 pandemic. While this is not available to apply for yet, they are continuing to update the terms and make it accessible to as many businesses as possible to receive the relief they need. Here are the latest terms for the loan program as of today, June 11, 2020.

Eligibility

To be eligible to receive this loan, businesses must meet the following criteria:

  • Established before March 13, 2020
  • Has no more than 15,000 employees or 2019 annual revenues or no more than $5 billion
  • Not an ineligible business according to SBA regulations
  • Created or organized in the U.S. with significant operations in and a majority of its employees based in the U.S.

The Federal Reserve Bank of Boston is backing the main street program by purchasing a 95% participation in the loans through a special investment vehicle.  Lenders are required to apply traditional loan underwriting in approving loans. Other criteria have been set that must be met as well and should be verified with your local eligible lender.

How Much You Can Borrow

The following chart shows the lending options that will be available once this program is made available by the Federal Serve. Please note, unlike the Paycheck Protection Program loans, Main Street loans will not be for forgivable. But, it has been noted that this can be received in conjunction with a loan through the PPP. And, borrowers are not obligated to make principal payments for the first two years making it more favorable for businesses trying to catch their breath.

 

Federal Reserve’s Main Street Lending Program Coming Soon 

Even though this loan program isn’t available yet, these criteria will help you determine if you will be eligible and be ready to go once you can apply through your approved local lender. If you’re in need of assistance to keep your business operating while picking up the pieces, this may be a great option for you.

If this loan program doesn’t look like it will be a good fit for your business, we are open and lending to businesses and restaurants across the U.S.. Contact your local loan consultant to get an offer today. We know times are tough and we strive to create custom loans to meet the ever-changing needs of business owners so you can continue to do what you love.

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