America’s banks will play a critical role in the program, which promises to enable up to $600 billion in new financing for businesses with up to 15,000 employees or $5 billion in 2019 revenues. Loan recipients cannot cancel or reduce any outstanding line of credit with any lenders. Some of the announced changes include: Earlier CARES Act stimulus loans like the Paycheck Protection Program Loans were generally limited to businesses with 500 employees or less, but these new loan facilities may be available for companies with up to 15,000 employees. Loan documents reflecting the new terms are expected to be available to registered lenders within the next week. New Loan Facility & Priority Loan Facility: The lesser of (a) $35 million; or (b) an amount that, when added to existing outstanding and undrawn available debt, does not exceed four times the borrower’s 2019 EBITDA. Eligible banks may originate new Main Street loans or use Main Street loans to increase the size of existing loans to businesses. Borrowers must also follow compensation, stock repurchase, and dividend restrictions that apply to direct loan programs under the CARES Act. Join to the sexy contacts online community, live your adventure. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. 3. On April 9, 2020, the Federal Reserve announced the $600 Billion Main Street Lending Program, which provides financial backing for lenders so they can offer stimulus loans to small-to-medium-sized businesses that may not have qualified for earlier Coronavirus Aid, Relief and Economic Security (CARES) Act stimulus loan options. The Reserve Bank’s participation has been raised to 95% of all loans. Firms seeking Main Street loans must commit to make reasonable efforts to maintain payroll and retain workers. What's Biden's plan for the economy, stimulus and unemployment? The average loan size was $9 million. The actions the Federal Reserve is taking to support employers of all sizes and communities across the country will: The Main Street Lending Program will enhance support for small and mid-sized businesses that were in good financial standing before the crisis by offering 4-year loans to companies employing up to 10,000 workers or with revenues of less than $2.5 billion. The Treasury also issued a new FAQ clarifying that Paycheck Protection Program loans of up to $2 million should be excluded when determining the maximum loan size under the Main Street Lending Program, if certain requirements are met, which should also widen access to more small businesses. All of the facilities mentioned above are established by the Federal Reserve under the authority of Section 13(3) of the Federal Reserve Act, with approval of the Treasury Secretary. The facility will purchase up to $500 billion of short term notes directly from U.S. states (including the District of Columbia), U.S. counties with a population of at least two million residents, and U.S. cities with a population of at least one million residents. Recipients may not pay dividends or buy back shares of its company during the course of the loan or for 12 months after the loan has been paid off. See our Advertiser Disclosure. This funding will assist households and employers of all sizes and bolster the ability of state and local governments to deliver critical services during the coronavirus pandemic. "Having said that, we're, we're continuing to work to improve Main Street, to make it more broadly available — make it pretty much to any company that needs it and that can service a loan." According to the Fed’s press release Friday, the Main Street program has made almost 400 loans totalling $3.7 billion. The following applies for loans under any of the three Main Street Loan Facilities. Business owners who have received a PPP loan are allowed to borrow through the Main Street Lending Program, as long as they meet eligibility criteria. The Department of the Treasury, using funding from the, Increase the flow of credit to households and businesses through capital markets, by expanding the size and scope of the Primary and Secondary Market Corporate Credit Facilities (PMCCF and SMCCF) as well as the Term Asset-Backed Securities Loan Facility (TALF). An overview of the Federal Reserve’s Main Street Lending Program and how to get involved if you are a potential borrower or lender. Comments may be sent to the feedback form until April 16. Interest rate: Adjustable rate of LIBOR (1 or 3 month) + 300 basis points, Principal payments deferred for two years and interest payments deferred for one year (unpaid. You can also read more about the Main Street Lending Program on this page. To be an “Eligible Business” the business: Main Street loans will have the following features: No. The Fed has lowered the minimum loan size for three Main Street facilities available to for profit as well as non profit borrowers from $250,000 to $100,000 and the fees have been adjusted to boost the supply of these smaller loans. Eligible state-level issuers may use the proceeds to support additional counties and cities.