Federal Reserve Announces Expansion of Scope and Eligibility for Main Street Lending Program

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The Federal Reserve has announced it is expanding the scope and eligibility for its Main Street Lending Program. Specific changes to the program include the following:

• Another loan option, the Main Street Priority Loan Facility, has been created. Under the new option, lenders would retain a 15% share on loans that, when added to existing debt, do not exceed six times a borrower’s income, adjusted for interest payment, taxes, depreciation, and other adjustments.

• Businesses with up to 15,000 employees or up to $5 billion in annual revenue are now eligible, compared to the initial program terms, which were for companies with up to 10,000 employees and $2.5 billion in revenue.

• The minimum loan size for certain loan options under the program has been lowered to $500,000 from $1 million.

The Federal Reserve has also stated that it recognizes the critical role that nonprofit organizations play throughout the economy and is evaluating a separate approach to meet their needs.