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Main Street Business Lending Program Main Street Business Lending Program

Main Street Business Lending Program

On April 9, 2020, the U.S. Treasury Secretary approved via press release the establishment of a Main Street Business Lending Program and a Municipal Liquidity Facility to ensure credit flows to small and mid-sized businesses with the purchase of up to $600 billion in loans.

Eligibility: Those eligible to take advantage of the program include:
  • Small and mid-sized businesses that were in good financial standing before the crisis;
  • Companies employing up to 10,000 workers or with revenues of less than $2.5 billion
  • Those who commit to make reasonable efforts to maintain payroll and retain workers;
  • Those who follow compensation, stock repurchase, and dividend restrictions while the loan is outstanding that include:
    • no payment of dividends with respect to the common stock of the eligible business, and
    • no repurchase of an equity security that is listed on a national securities exchange of the recipient or any parent company of the recipient
  • Firms that have taken advantage of the Paycheck Protection Program (PPP) and may also take out Main Street Loans.
Loan Terms: 4 years, with principal and interest payments deferred for one year

Lenders: Eligible banks may originate new Main Street loans or increase the size of existing loans to businesses. Banks will retain a 5 percent share, selling the remaining 95 percent to the Main Street facility, which will purchase up to $600 billion of loans.

As further details of the program develop, lenders, borrowers and other stakeholders may provide input on the program by April 16 here.

If you have any questions about how to obtain loans under the Main Street Business Lending Program or whether the program is right for your business, please feel free to reach out to Greg Gorospe or Chris Magill.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.
 
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