Main Street Lending Program Funds Still Available
Beyond the PPP loans and EIDL $$$ we now have the little known Main Street Lending Program. It is the best kept secret for mid-size businesses in need of financial relief.
The Main Street program is one of a series of programs the Federal Reserve announced in April to provide up to $2.3 trillion in loans to households, businesses, non-profits, and state and local governments struggling to deal with the COVID-19 pandemic. Specifically, the Main Street program supports loans to U.S. companies with less than $2.5 billion in 2019 revenue that were in good financial standing before the COVID-19 crisis and subsequent quarantines stalled the American economy.
Bolstered by $75 billion in equity provided by Treasury through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Main Street program supports lenders that register for the program by purchasing 95% of each loan that meets eligibility and documentation requirements.
The Main Street program’s minimum loan size is $250,000, but this loan program geared for midsize businesses is also very different from others that have come before it because the debt must be repaid, and banks must retain some of the credit risk. Companies have five years to pay back the loans, and principal and interest are initially deferred.
A number of changes have been made to the program since its debut, to make it easier to apply.