Is COVID-19 Threatening Your Business? Where to find stimulus money

The Federal Reserve Board on Thursday announced it is expanding the scope and eligibility for the Main Street Lending Program (MSLP).

When the initial terms of Main Street were announced, the Board indicated that it was seeking feedback from the public. 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.

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 Main Street Lending Program was established under Section 13(3) of the Federal Reserve Act, with approval of the Treasury Secretary.

Join us as we discuss what these changes mean for your business. Whether you received a PPP loan or not, it is clear that the PPP is a stopgap to a long-term problem. It might be time to look at a more structural solution. We will answer the following questions:

• Is my company eligible? Would the MSLP be a sustainable option?
• How can I use the money?
• What are the terms of the loan?
• What if I got a PPP and/or EIDL loan?
• When/where can I apply?

We hope you can attend!