Federal Reserve’s $600 Billion Main Street Lending Program Fully Operational
The U.S. Federal Reserve said last Monday the Main Street Lending Program (MSLP) is fully operational.
The Federal Reserve Bank of Boston also announced its intention to publish in the coming days a state-by-state listing of lenders accepting new business customers under the Main Street program and electing to be listed.
As required by the program, lenders will assess a borrower for a Main Street loan based on meeting the terms of the program and the lenders’ own underwriting standards, as part of evaluating financial condition and creditworthiness.
Lenders’ loan approvals are contingent on those factors.
Business borrowers must apply for MSLP loans through participating local banks. The Federal Reserve will purchase back 95 percent of loans from eligible lenders.
Loans are available until September 30, 2020.
Eligible borrowers include businesses with 15,000 employees or fewer: or businesses with 2019 revenues of $5 billion or less.
Eligible lenders include participating federally insured depository institutions including, banks, credit unions and savings and loans institutions.
Borrowers have 5 years to repay a loan made under the MSLP program. Principal and interest payments on the loans will be deferred for up to two years, with 33 percent payments due in each of the years following that for new loans.
Borrowing limits on secured or unsecured loans start at a minimum of $250,000 up to a maximum of $50 million. The interest rate on the loan is LIBOR plus 3 percent.
Unlike the federal PPP and EIDL Advance emergency loans, MSLP loans must be paid back in full.
Lenders and borrowers can visit the Main Street Lending Program webpage to find program information, including frequently asked questions, and can subscribe for email updates.
Inquiries about the program can be emailed to: MSLP@bos.frb.org.
