Make Up Your Mind! The Fed Amends the Main Street Lending Program Again

On June 8, 2020, the Federal Reserve (the “Fed”) issued a press release regarding changes to the three lending facilities under the Main Street Lending Program: the Main Street New Loan Facility (“MSNLF”), the Main Street Priority Loan Facility (“MSPLF”) and the Main Street Expanded Loan Facility (“MSELF”). This press release does not indicate when the Main Street Lending Program will be open for lender registration, but it does say that it will be open soon and the Fed will actively buy loans shortly after opening of the program.

The following terms of the lending facilities were modified:

• Maturity was extended for all three lending facilities from 4 years to 5 years.
• Interest will still be deferred for the first year of the term of the loan; however, principal will be deferred for the first 2 years.
• The minimum loan size for the MSNLF and the MSPLF was decreased from $500,000 to $250,000.
• The maximum loan size for all three lending facilities was increased:
  • MSNLF: increased from $25 million to $35 million for the first prong of the “lesser of” test;
  • MSPLF: increased from $25 million to $50 million for the first prong of the “lesser of” test; and
  • MSELF: increased from $200 million to $300 million for the first prong of the “lesser of” test.
• The participation rate for the MSPLF was increased from 85% to 95% to match the other lending facilities.

For a more extensive review of the Main Street Lending Program as a whole, please read our article published HERE.