In an effort to help businesses through the ongoing COVID-19 pandemic, the Federal Reserve has unveiled details of a new loan program called the Main Street Lending Program. Unlike the Paycheck Protection Program (PPP) administered through the SBA, the loans issued through the Main Street Lending Program are NOT forgivable, and the principal must be repaid in its entirety. This program is ideal for small and mid-sized businesses that were unable to access the PPP or require additional financial assistance.
Who Can Apply?
Candidates for the program are U.S. businesses who were in sound financial condition before COVID-19. They must have fewer than 15,000 employees OR had less than $5 billion of revenue in 2019.
What are the Loan Terms?
The Main Street Lending Program will offer three different loan options, but the loan terms are the same for all of them. All loans will have a 4 year maturity with principal and interest payments deferred for one year, and the interest rate is LIBOR (London Interbank Offered Rate) plus 3%. The loan amounts are based on a multiple of EBITDA and range from $500,000 to $200 million. Applications for these loans may be submitted through any eligible lender, defined as a U.S. federally insured bank, savings association, or credit union. The specific loan terms for each of the three programs can be found here.
Can I Apply for a Main Street Loan Even If I Received a PPP Loan?
Yes, PPP borrowers are eligible to apply for a loan in the Main Street Lending Program as long as they meet the eligibility requirements.
When Can I Apply?
The Federal Reserve is still creating the infrastructure necessary to operate the Main Street Lending Program. More information will be posted on this website once available.
Helpful Links
Contact your ATKG representative with any questions you may have about the program or to assist you with the application process.
ATKG Coronavirus Newsroom
Visit the ATKG Coronavirus newsroom to view thought leadership released by our experts addressing the fast paced changes occurring in the US resulting from the COVID-19 pandemic.
Julie Spurlock is a CPA in the firm’s tax practice. She joined ATKG in 2017 as an intern while attending undergrad at St. Mary’s University. She went on to enter the master’s in accounting program at the University of Texas at Austin. Julie received the 2016-2017 Accounting Excellence Award given by the Texas Society of Certified Public Accountants, which recognizes one outstanding student from each Texas college and university.
For further information on this topic or other tax questions please contact your ATKG tax advisor at 210.733.6611 or office@atkgcpa.com.
