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The headquarters of the Federal Reserve Bank of Boston. Photo Courtesy of Fox-orian / CC BY-SA 3.0
The Federal Reserve Bank of Boston has released instructions and documents lenders will use in the Main Street Lending Program, but the program’s launch date still has not been announced.
The Main Street Lending Program was created to help small and midsized businesses affected by the coronavirus pandemic. The Federal Reserve developed the program after the CARES Act provided funding to the Treasury Department for the loan program. The Boston Fed was designated to administer the program.
“The availability of credit is intended to help companies that were in sound financial condition prior to the onset of the COVID-19 pandemic maintain their operations and employment until they have recovered from, or adapted to, the impacts of the pandemic,” the Boston Fed said in a statement. “The loans must be repaid, and both the borrower and lender must meet eligibility requirements to participate.”
The program will be open to businesses with up to 15,000 employees or up to $5 billion in 2019 annual revenue. The minimum loan size is $500,000. The program has three loan options, with differences including risk retention by the lender and repayment terms.
Unlike Paycheck Protection Program loans, Main Street loans are not forgivable. Loan repayments can be deferred during the first year for all three loan options. The loan term is four years.
The Boston Fed said in its statement that the launch date would be announced when it is available.
