Revisions Announced to Main Street Lending Program

May 4, 2020

The U.S. Federal Reserve (Federal Reserve) announced revisions to the Main Street Lending Program (Program) to facilitate lending to small and medium-sized businesses by eligible lenders. A copy of the announcement is available here.

The U.S. Department of Treasury, using funds appropriated under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) will invest $75 billion in a special purpose vehicle (SPV) established by the Board of Governors of the Federal Reserve, which, along with a loan commitment from the Federal Reserve to the SPV, will enable up to $600 billion in new financing for eligible small and mid-sized businesses.

The Program, as currently revised, is comprised of three separate facilities:

• Main Street New Loan Facility to facilitate new loans to eligible businesses (New Loans);
• Main Street Expanded Loan Facility to facilitate the extension of already existing loans for eligible businesses (Expanded Loans); and
• Main Street Priority Loan Facility, similar to New Loans, but increases the amount eligible lenders will retain of eligible loans to 15% (Priority Loans).

Linked here is an FAQ prepared by Tarter Krinsky & Drogin highlighting key aspects of the Program, as revised.

Attorneys at Tarter Krinsky & Drogin have analyzed the Federal Reserve’s announcement in its entirety and are happy to assist with any inquiries. Please contact your relationship attorney or if you have questions on how this may impact your business. 

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