Overview: Main Street Lending Program
The Federal Reserve announced that it is establishing a “Main Street Lending Program,” which will provide additional credit to small and medium-sized businesses to help maintain their operations and payroll during the COVID-19 pandemic. Main Street consists of three programs: 1) Main Street New Loan Facility, 2) Main Street Expanded Loan Facility and 3) Main Street Priority Loan Facility. All three facilities use the same eligible lender and borrower criteria, and have many of the same features, including the same maturity, interest rate, deferral of principal and interest for one year, and ability of the borrower to prepay without penalty. The loan types also differ in how they interact with the Eligible Borrower’s existing outstanding debt, including with respect to the level of pre-crisis indebtedness a borrower may have incurred.