Main Street Lending Program

The Fed’s $2.3 Trillion Main Street Lending Program

In response to the COVID-19 outbreak, on April 9, 2020 the Federal Reserve Board unveiled details about the previously announced Main Street Lending Program designed to get 4-year loans with deferred principal and interest payments to small and mid-sized businesses with up to 10,000 employees or less than $2.5 billion in revenue.

While the Small Business Administration’s Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program were aimed at smaller businesses, the Main Street Lending Program is also open to larger firms needing assistance. Importantly, you can apply for a Main Street Lending Program loan even if you’ve also applied for a loan under the PPP, but you cannot apply if you participate in other programs such as the Main Street Expanded Loan Facility (MSELF) or the Primary Market Corporate Credit Facility.

How Marcum Can Help

Marcum’s experienced financial professionals are positioned to assist during this uncertain time, with specialized knowledge and practical experience. Marcum helps businesses innovate and seize opportunities, reaching the right solution for you and your organization. Our services include:

Assistance with gathering supporting documents.
Calculating maximum loan amount when applicable.
Supporting you through the loan process however you need us to.

ELIGIBILITY REQUIREMENTS

U.S. business with up to 10,000 employees or less than $2.5 billion in revenue in 2019.
In good financial standing prior to the COVID-19 outbreak.
Must make reasonable efforts to maintain payroll and retain workers.
Must follow all applicable restrictions that apply to direct loan programs under the CARES Act, i.e., compensation, stock repurchase, and dividend repurchase restrictions.

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.
No details are available yet about when you can apply or the application process, which is likely to vary from lender to lender. Applications could be through a portal or, in the case of smaller banks, an application form with supporting documentation.
We advise to begin preparing now by gathering information about your 2019 IRS payroll filings, all payroll records supporting compensation figures and total workforce numbers. In short, pull together any information that helps you make the case for why the loan is needed.

Eligible Loans Under the Main Street New Loan Facility

5 year maturity (Previously 4)
Interest payments deferred for 1 year (unpaid interest is capitalized). Principal payments deferred for 2 years. (Previously, interest + principal deferred for 1 year)
Adjustable interest rate – LIBOR (1 or 3 month) + 300 basis points
Loan Size: $250k – $35 Million (Previously $500k – $25 Million)
Repayment Schedule: Years 3-5; 15%, 15%, 70% (Previously, Years 2-4; 33% each year)
No early prepayment penalty

Eligible Loans Under the Main Street Expanded Loan Facility

5 year maturity (Previously 4)
Interest payments deferred for 1 year (unpaid interest is capitalized). Principal payments deferred for 2 years. (Previously, interest + principal deferred for 1 year)
Adjustable interest rate – LIBOR (1 or 3 month) + 300 basis points
Loan Size: $10 Million – $300 Million (Previously $10 Million – $200 Million)
Repayment Schedule: Years 3-5; 15%, 15%, 70% (Previously, Years 2-4; 15%, 15%, 70%)
No early prepayment penalty