The Federal Reserve Board on Thursday April 30 announced it is expanding the scope and eligibility for the Main Street Lending Program. As part of its broad effort to support the economy, the Federal Reserve developed the Main Street Lending Program to help credit flow to small and medium-sized businesses that were in sound financial condition before the pandemic.
The changes include:
Expanding the pool of businesses eligible to borrow. Businesses with up to 15,000 employees or up to $5 billion in annual revenue will now be able to access loans through the Main Street Lending Program, doubling the revenue limit and raising the employee limit by 50%
Lowering the minimum loan size for certain loans to $500,000. The minimum loan size for Main Street was reduced to $500,000 from $1 million, and another loan option for companies with more leverage was added, meaning the program now has three facilities: new loans, priority loans and expanded loans.
The three loan options include:
• The New Loan Facility, which has a maximum loan size of $25 million or four times 2019 adjusted EBITDA. Lenders will retain a 5% stake in the loan. The minimum loan size is $500,000.
• The Priority Loan Facility, which has a maximum loan size of $25 million or six times 2019 adjusted EBITDA. Lenders will retain a 15% stake and the minimum loan size is $500,000.
• The Expanded Loan Facility, which will lend out as much as $200 million, 35% of a borrower’s outstanding debt or six times 2019 adjusted EBITDA. Lenders will retain a 5% stake. The minimum loan size is $10 million.
In addition:
- Under the option for more-levered firms, lenders retain a 15% share on loans that when added to existing debt do not exceed six times earnings adjusted for interest, taxes and depreciation.
- A separate option for nonprofits is being considered.
More details: https://www.federalreserve.gov/newsevents/pressreleases/monetary20200430a.htm
English 
Spanish