Is the Main Street Lending Program Right for Your Business?

There’s an alternative to the Paycheck Protection Program for businesses struggling or overwhelmed by PPP’s requirements and frequent changes.

The Federal Reserve is offering the Main Street Lending Program and has recently expanded the program’s criteria.

The Fed’s chairman, Jerome Powell, recently announced that the minimum loan size would decrease from $500,000 to $250,000. The team of each loan increased from four years to five. And there’s now the possibility the program could expand to nonprofits in addition to businesses.

Unlike PPP, though, Main Street’s loans are not forgivable. The program is not yet open to borrowers, with only the lender portal now online.

According to the Fed website, “Once the Program is operational, small and medium-sized businesses interested in the Program can apply for Program loans by contacting an eligible lender.”

Once the program does open, businesses might be eligible if:

• They have 15,000 or fewer employees or fewer; OR
• They had 2019 revenues of $5 billion or less.

Main Street Lending Program loans have a five-year maturity. Businesses can defer principal payments for two years and interest payments for one year.

Also, as a reminder, the SBA is still accepting PPP loan applications through June 30, and EIDL is now open to all eligible applicants again.

This communication is intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.