On April 9, 2020, the Federal Reserve announced that it is taking additional action to provide up to $2.3 trillion in loans to support the economy through various programs, including the Main Street Lending Program (“MSLP”). The Fed intends that the MSLP will ensure credit flow to small and mid-sized businesses by providing support to businesses that were in good financial standing prior to the COVID-19 crisis, on terms and conditions to be set by the Federal Reserve.
The MSLP consists of two facilities:
- The Main Street New Loan Facility (“MSNLF”) for unsecured term loans originated on or after April 8, 2020; and
- The Main Street Expanded Loan Facility (“MSELF”) for upsize tranches of secured or unsecured term loans originated before April 8, 2020 (provided the upsize is on or after April 8, 2020).
Businesses can take advantage of loans made under MSLP in addition to the SBA Section 7(a) Paycheck Protection Program loans, but must elect among the MSNLF, MSELF, and the Primary Market Corporate Credit Facility, and may not participate in more than one of these programs. All depository institutions are eligible to participate in the MSLP, and all U.S. companies with up to 10,000 employees or up to $2.5 billion in 2019 annual revenues are potentially eligible borrowers.
Our Bryan Cave Leighton Paisner colleagues have prepared this summary of the Main Street Lending Program.