Main Street Lending Program – Information for Lenders
June 3, 2020
The Federal Reserve invites lenders across the country to learn more about the Main Street Lending Program. This Thursday, June 4, the Federal Reserve will host a webinar for lenders (Off-site) so you can learn more about how the program may be helpful to you and your customers.
With the involvement of the Federal Reserve and U.S. Treasury, this program will support the flow of credit to small and medium-sized businesses in your community and around the country. We encourage lenders to register for the webinar and evaluate this opportunity.
The Main Street Lending Program is designed to assist you and other lenders in meeting the needs of business borrowers, existing or new. The availability of up to $600 billion in additional credit can help companies that were in sound condition prior to the onset of the pandemic maintain their operations until conditions improve. As a lender, your participation in this program can help support economic resilience in your community and around the country.
The Fed will participate in the lending by purchasing an 85 or 95 percent interest in the loans.
Interested businesses will work with an eligible lender to determine if they meet the program requirements, as well as the lender’s own underwriting standards. The lender will determine whether a business is approved for a program loan.
Loans originated under the program have several features that may help businesses facing challenges, including:
- 4-year floating rate terms
- Principal and interest payments deferred during year 1, with principal payments beginning at the end of year 2
- Loan amounts ranging from $500,000 to $200 million, depending on the facility
- Lending limits based on 2019 earnings and combined debt
- Three different loan types, each with somewhat different characteristics
Lenders are eligible to receive an origination fee from the business borrower, as well as servicing and other fees.
Lenders can refer business customers inquiring about the program to a concise overview, available in shareable formats at www.bostonfed.org/mslp-overview (Off-site).
Further, the program’s website, www.bostonfed.org/mslp (Off-site), contains program information for lenders, including term sheets (Off-site), forms and agreements (Off-site), and Frequently Asked Questions (FAQs) (Off-site, PDF). Lenders and other interested parties are encouraged to sign up for program updates (Off-site) by email, on the website. And any inquiries can be sent to MSLP@bos.frb.org.
We encourage all eligible financial institutions to explore this program’s potential to help them serve the businesses in their markets during these challenging times. We hope you will consider joining the webinar on Thursday.