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Press Release
April 30, 2020

Federal Reserve Board announces it is expanding the scope and eligibility
for the Main Street Lending Program
For release at 10:00 a.m. EDT
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The Federal Reserve Board on Thursday announced it is expanding the scope and eligibility for the Main
Street Lending Program. As part of its broad effort to support the economy, the Federal Reserve developed
the Main Street Lending Program to help credit flow to small and medium-sized businesses that were in
sound financial condition before the pandemic.
When the initial terms of Main Street were announced, the Board indicated that, because the financial needs
of businesses vary widely, it was seeking feedback from the public on potential refinements. More than 2,200
letters from individuals, businesses, and nonprofits were received. In response to the public input, the Board
decided to expand the loan options available to businesses, and increased the maximum size of businesses
that are eligible for support under the program. The changes include:
Creating a third loan option, with increased risk sharing by lenders for borrowers with greater leverage;
Lowering the minimum loan size for certain loans to $500,000; and
Expanding the pool of businesses eligible to borrow.
Under the new loan option, lenders would retain a 15 percent share on loans that when added to existing debt
do not exceed six times a borrower's income, adjusted for interest payments, taxes, and depreciation and
other appropriate adjustments. This compares to the existing loan options where lenders retain a 5 percent
share on loans, but have different features. Under all of the loan options, lenders will be able to apply their
industry-specific expertise and underwriting standards to best measure a borrower's income. In total, three
loan options—termed new, priority, and expanded—will be available for businesses. The chart below
summarizes the different loan options.
Additionally, 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 two of the options was also lowered to $500,000 from $1 million.
With the changes, the program will now offer more options to a wider set of eligible small and medium-size
businesses.
The Board recognizes the critical role that nonprofit organizations play throughout the economy and is
evaluating a separate approach to meet their unique needs.
The Main Street Lending Program was established under Section 13(3) of the Federal Reserve Act, with
approval of the Treasury Secretary. The Treasury will provide $75 billion for the program using funds from the
Coronavirus Aid, Relief, and Economic Security Act. Frequently asked questions and answers for lenders and
borrowers are also available. A start date for the program will be announced soon.
Main Street Lending
Program Loan Options
Term
Minimum Loan Size

New Loans

Priority Loans

Expanded Loans

4 years

4 years

4 years

$500,000

$500,000

$10,000,000

Main Street Lending
Program Loan Options
Maximum Loan Size

New Loans

Expanded Loans

Lesser of $25M or 4x
Lesser of $25M or 6x Lesser of $200M, 35% of outstanding and undrawn
2019 adjusted EBITDA 2019 adjusted EBITDA
available debt, or 6x 2019 adjusted EBITDA

Risk Retention
Payment (year one
deferred for all)

Priority Loans

5%

15%

5%

Years 2-4: 33.33% each
year

Years 2-4: 15%, 15%,
70%

Years 2-4: 15%, 15%, 70%

LIBOR + 3%

LIBOR + 3%

LIBOR + 3%

Rate

For media inquiries, call 202-452-2955

Term sheet: Main Street New Loan Facility (PDF)
Term sheet: Main Street Priority Loan Facility (PDF)
Term sheet: Main Street Expanded Loan Facility (PDF)
Main Street Lending Program Frequently Asked Questions (PDF)

Related Content
Board Votes
Main Street Lending Program

Last Update: April 30, 2020


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102