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Main Street Lending Program announced – More details coming after April 16
The Treasury Department and the Federal Reserve announced April 9 the launch of the Main Street Lending Program, which will make available up to $600 billion in financing available to assist employers of all sizes manage cash flow stresses as they deliver critical services during the crisis, according to the National Restaurant Association.
The Treasury Department is finalizing the program and was seeking feedback/comments by April 16, 2020. The specific timing and details about the application process have not yet been released.
- Geared toward small and mid-size businesses with up to 10,000 employees or with less than $2.5 billion in 2019 annual revenue; must be a business that is created or organized in the U.S. with significant operations and a majority of employees based in the U.S.
- 4-year loan.
- Principal and Interest payments will be deferred for 1 year.
- Lenders and banks can originate this as a new loan or use this loan to increase the size of existing loans, which means a business that has taken out a Payroll Protection Program loan may also take out this loan.
- Borrowers must commit to make “reasonable efforts” to maintain payroll and retain workers.
- Minimum loan size of $1 million
- Maximum loan size that is the lesser of (1) $25 Million, or (2) an amount, when added to the eligible borrower’s existing outstanding debt, does not exceed four times the borrower’s 2019 earnings before interest and taxes.
- Prepayment without penalty.
Announcement with term sheets: