Registration for lenders to participate in the Federal Reserve’s Main Street Lending Program is now open, according a web page on the Boston Federal Reserve Bank’s website.
Once they have registered, lenders become “eligible” to provide funding through the facility. Eligible borrowers apply for loans by contacting an eligible lender.
The program is not yet making loans. Fed Chair Jerome H. (“Jay”) Powell said last week at a press conference that once lenders are registered, “at that time, loans can begin to be made.”
According to the Fed, lenders will retain a percentage of the loans. U.S. businesses may be eligible for loans if they meet either of the following conditions:
- the business has 15,000 employees or fewer; or
- the business had 2019 revenues of $5 billion or less.
Loans issued under the program will have a five-year maturity, deferral of principal payments for two years, and deferral of interest payments for one year. Eligible lenders may originate new loans (under other Fed facilities, the Main Street New Loan Facility (MSNLF) and the Main Street Priority Loan Facility (MSPLF). The size of existing loans may also be increased (or “upsized under loans made to eligible businesses under the Main Street Expanded Loan Facility (MSELF), the Fed said.