On June 8, 2020, the Federal Reserve Bank of Boston released updated Frequently Asked Questions (FAQs) and Term Sheets with respect to the Main Street Lending Program. Subsequently, on June 11, 2020, it released corresponding updates to many of the program’s documentation. The Board changed the terms and expanded its Main Street Lending Program to allow more small and medium-sized businesses to participate.

The updates included reducing the minimum loan amounts from $500,000 to $250,000, and increasing the maximum loan amounts available under each facility to $35 million for the New Loan Facility (MSNLF), $50 million for the Priority Loan Facility (MSPLF) and $300 million for the Expanded Loan Facility (MSELF).

On June 15th, the Board announced that the Main Street program is now open for lender registration and participation.

Other changes to the terms of the loans include:

  • Increasing the term of each loan option to five years, from four years
  • Extending the repayment period for all loans by delaying principal payments for two years, rather than one
  • New amortization schedule for the New Loan Facility (MSNLF)
  • Raising the Reserve Bank’s participation to 95% for all loans

The chart below outlines the changes and highlights updates to the terms.

Main Street New Loan Facility (MSNLF)Main Street Priority Loan Facility (MSPLF)Main Street Expanded Loan Facility (MSELF)
Term5 years (previously 4 years)
RateAdjustable rate of LIBOR plus 300 basis points (3%)
Interest PaymentsDeferred for one year
Principal Repayments, Years 1-2Principal deferred for two years
(previously principal deferred for one year)
Principal Repayments, Years 3-515%, 15%, 70%
(previously 33.33%,33.33%,33.33% (years 2-4)
15%, 15%, 70%
(previously 15%, 15%, 70% for years 2-4)
Minimum Loan Size$250,000
(previously $500,000)
$10 million
Maximum Loan SizeThe lesser of $35 million, or an amount that, when added to outstanding and undrawn available debt, does not exceed 4.0x adjusted EBITDA
(previously $25 million)
The lesser of $50 million, or an amount that, when added to outstanding or undrawn available debt, does not exceed 6.0x adjusted EBITDA
(previously $25 million)
The lesser of $300 million, or an amount that, when added to outstanding or undrawn available debt, does not exceed 6.0x adjusted EBITDA
(previously $200 million)
Lender Participation5%5%
(previously 15%)
5%
Reserve Bank ParticipationMain Street SPV* will purchase a 95% interest in the loanMain Street SPV* will purchase a 95% interest in the loan
(previously 85%)
Main Street SPV* will purchase a 95% interest in the loan
Prepayment AllowedYes, without penalty
Loan FeesOrigination and transaction fees may apply

*The Federal Reserve Bank of Boston will lend to a single purpose vehicle (SPV) in which the Treasury Department will make a $75 billion equity investment with funds from the CARES Act.

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