The Federal Reserve's Main Street Lending Program
Business loans to help eligible small and medium-sized companies through the COVID-19 pandemic.
This page was updated on June 8, 2020 to reflect the Federal Reserve’s announcement to expand the Main Street Lending Program to allow more small and medium-sized businesses to be able to receive support.
What it is
The program is designed to help credit flow to small and medium-sized businesses that were in sound financial condition before the onset of the COVID-19 crisis, but now need loans to help maintain their operations until they have recovered from, or adapted to, the impacts of the pandemic.
Loans originated under the program have several features that will help businesses facing challenges. The program offers 5-year loans, with floating rates, and principal and interest payments deferred as indicated in the chart below to assist businesses facing temporary cash flow interruptions.
The loans range in size from $250,000 to $300 million – a wide range that may support a broad set of employers.
What it isn’t
Main Street loans are not grants and cannot be forgiven.
How it works
Interested businesses will work with an eligible lender to determine if they meet the program requirements, which are available online, as well as the lender’s own underwriting standards. The lender will determine whether a business is approved for a loan. The Fed will participate in the lending by purchasing a 95% interest in the loan. The lender retains 5% of the loan. Refer to the diagram at the end of the document for a schematic on how the program works.
To assist a broad range of businesses, the program will offer three different loan types, each with somewhat different characteristics as indicated in the chart.
|New Loan Facility||Priority Loan Facility||Expanded Loan Facility|
|Loan Term||5 years|
|Principal Payments||Principal deferred for two years. Years 3-5: 15%, 15%, 70%|
|Interest Payments||Deferred for one year|
|Interest Rate||Adjustable rate of LIBOR (1 or 3 mo.) plus 300 basis points.|
to $35 million
to $50 million
to $300 million
|Maximum Combined Debt to Adjusted 2019 EBITDA||4 times||6 times||6 times|
|Lender Participation Rate||5%|
|Fed Participation Rate||95%|
|Prepayment Allowed||Yes, without penalty|
|Business Size Limits||15,000 employees or fewer, or 2019 revenues of $5 billion or less|
|Fees||Origination and transaction fees may apply|
To get started
Business borrowers can review the program parameters prior to approaching a lender, and visit the borrowers page for additional information.
Lenders interested in the program can start at the lenders page, where information will be posted as it becomes available.
For additional resources visit bostonfed.org/mslp where you’ll find frequently asked questions, term sheets, and the option to subscribe to email updates about the program.
General questions about the program may be sent to MSLP@bos.frb.org.
The Main Street program aims to assist businesses that employ a major share of the American workforce. For smaller businesses, in addition to reviewing the Main Street Lending Program materials, it may be useful to consult the Small Business Administration’s Coronavirus Small Business Guidance & Loan Resources and the Treasury’s Community Development Financial Institutions Fund - Tools and Resources, which has a list of current certified CDFIs, many of which make loans to small businesses and provide technical assistance.*
The Main Street Lending Program is administered by the Federal Reserve Bank of Boston, which has established a special purpose vehicle to purchase loan participations from eligible lenders across the U.S.
*Please note, information about these lenders is provided as a convenience and for informational purposes only. This does not constitute an endorsement or an approval by the Federal Reserve Bank of Boston or Federal Reserve System.