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  • Writer's pictureFair, Anderson Langerman


Updated: Apr 23, 2020

The Federal Reserve announced yesterday, a series of programs that will provide up to $2.3 trillion in loans to local states, governments, businesses and households currently struggling as a result of the Coronavirus pandemic. At FAL, we’re watching for more information related to the Main Street Lending Program which has been slated to receive $600 billion for government loans to small and midsize businesses, many of which were ineligible for the PPP.


Based on currently available information, the following businesses will qualify for the Main Street Lending Program:

  • Companies with up to 10,000 employees

  • Companies with less than $2.5 billion in 2019 revenue

  • Companies that were in good financial standing prior to the pandemic’s stay-at-home orders

Current Information RE: Terms

  • Four-year term with principal and interest payments deferred for the first year.

  • Lenders may originate new Main Street business loans or use Main Street funding to increase the size of existing loans.

  • Loans subject to an adjustable rate of the secured overnight financing rate (SOFR) plus 250 to 400 basis points, with prepayment of the loan permitted without penalty.

  • Loans must be for at least $1 million and no more than the lesser of $25 million or an amount, when added to the borrower’s existing outstanding and committed but undrawn debt, four times the borrower’s 2019 earnings before interest, taxes, depreciation, and amortization (EBITDA).

  • Loans added to existing loans must be at least $1 million and no more than the lesser of $150 million, 30% of the borrower’s existing outstanding and committed but undrawn bank debt, or an amount that, when added to the borrower’s existing outstanding and committed but undrawn debt, does not exceed six times the borrower’s 2019 EBITDA.

  • Companies borrowing the funds must make “reasonable efforts” to maintain their payroll and retain their employees during the term of the loan.

  • Borrowers must not use funds to repay or refinance preexisting loans and lines of credit.

Like the PPP, the Main Street Lending Program loans will be secured through banks and other authorized lenders. Current guidance states that companies can be eligible and receive funds via the PPP and Main Street loans.

The Fed’s chief banking supervisor has stated that it will likely take two to three weeks before banks are ready to begin lending via The Main Street Program.

The Fed has also committed to extend regulatory relief and additional liquidity to financial institutions to help support the Paycheck Protection Program (PPP). In addition, the Trump Administration has asked Congress for an additional $250 billion in funding for the PPP. The funding has not yet been approved by Congress.

We’re watching the Main Street Lending Program closely and will update our clients and friends with a link to the application and program details once available. In the meantime, we recommend starting discussions with your bank now about these government loans and your potential eligibility for small business loans.

Please contact a member of your client service team at FAL with questions or email us at

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