FAQs on “Main Street” lending program (COVID-19)
FAQs on “Main Street” lending program
The U.S. Federal Reserve Bank today released a set of “frequently asked questions” (FAQs) concerning the “Main Street” lending program as established to address the economic impact of the coronavirus (COVID-19) pandemic on small and medium-size businesses.
The “Main Street” lending program is established by funds appropriated by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (Pub. L. No. 116-136).
Read the Federal Reserve FAQs [PDF 315 KB]
Today’s guidance items allow for:
- Creation of a new loan facility—the “Main Street Priority Loan Facility”—that appears to allow for slightly different purchase percentages (85% by special purpose vehicles (SPVs) and banks retain 15%), with most other terms appearing to be similar
- Clarification of the definition of an eligible borrower, which now includes an “ineligible business” concept that leverages guidance released under the Paycheck Protection Program (PPP) in April 2020
- Expansion of the eligibility threshold to allow up to 15,000 employees and $5 billion in revenue (from previous limitation of 10,000 employees and $2.5 billion in revenue)
- Various changes to the terms of the loans available under the different Main Street facilities
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