Federal Reserve Expands the Main Street Lending Program (MSLP)
Last week, the Federal Reserve announced an expansion of the MSLP to allow more small and mid-sized businesses to be eligible for financial support.
Specifically, the Federal Reserve lowered the minimum loan amount ($250,000 down from $500,000), raised the maximum loan limit for each of the three loan types, adjusted the principal repayment schedule to begin after two years instead of one and extended the loan term to five years up from four years.
Additionally, banks will now be required to hold 5 percent of the loans on their balance sheets for all three facilities; previously they were required to hold 15 percent of loans to riskier businesses.
According to Federal Reserve Chairman Jerome Powell, “supporting small and mid-sized businesses so they are ready to reopen and rehire workers will help foster a broad-based economic recovery and I am confident the changes we are making will improve the ability of the Main Street Lending Program to support employment during this difficult period.”
The Federal Reserve continues to suggest the MSLP will be open for eligible lenders “soon.”
