The FRB, through the Federal Reserve Bank of Boston, has released additional information for potential lenders and borrowers in the Main Street Lending Program (MSLP), including a form loan participation agreement, lender certifications and covenants, borrower certifications and covenants, other legal documents, and updated Frequently Asked Questions.
A launch date has not yet been set. However, during a Senate hearing on May 19, 2020, Treasury Secretary Mnuchin and FRB Chair Powell each indicated the MSLP would be operational by June.
The FRB established the MSLP to support lending to small and medium-sized businesses that were in “sound financial condition before the onset of the COVID-19 pandemic.” The MSLP will operate through three facilities: the Main Street New Loan Facility (MSNLF), the Main Street Priority Loan Facility (MSPLF), and the Main Street Expanded Loan Facility (MSELF). It will be administered by the Federal Reserve Bank of Boston, which established a Special Purpose Vehicle to purchase loan participations from eligible lenders across the United States.
Under the MSLP:
- Lenders will retain a percentage of the loans (5 percent for the MSNLF and MSELF, 15 percent for the MSPLF).
- U.S. businesses may be eligible for loans if they meet at least one of the following conditions: (1) the business has 15,000 employees or fewer; or (2) the business had 2019 revenues of $5 billion or less.
- Loans will have a four year maturity, and principal and interest payments on the loans will be deferred for one year.
- Eligible lenders may originate new loans (under the MSNLF and MSPLF) or increase the size of existing loans (under the MSELF) made to eligible businesses.
Eligible lenders include a U.S. federally insured depository institution, a U.S. branch or agency of a foreign bank, a U.S. BHC, a U.S. SLHC, a U.S. IHC of a foreign bank, or a U.S. subsidiary of any of these.
The MSLP Forms and Agreements are available here.
The latest MSLP Frequently Asked Questions are available here.
The FRB’s Main Street Lending Program web page is available here.