Main Street Lending Program Update (June 8, 2020)

Monday, June 8, 2020

Dear ICSC Members, 

This afternoon the Federal Reserve Board announced an expansion of its Main Street Lending Program (MSLP) to allow more small and medium‑sized businesses to receive support. The board lowered the minimum loan amount (a request of ICSC), raised the maximum loan limit, adjusted the principal repayment schedule to begin after two years, and extended the term to five years. The changes included the following:

• Lowering the minimum loan size for certain loans to $250,000 from $500,000;
• Increasing the maximum loan size for all facilities;
• 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; and
• Raising the Reserve Bank's participation to 95% for all loans.

The Fed noted that it expects the Main Street program to be open for lender registration soon and once open encourages participating lenders to begin making Main Street loans immediately. The MSLP intends to purchase 95% of each eligible loan that is submitted to the program, provided that the required documentation is complete and the transactions are consistent with the relevant MSLP requirements. The MSLP will also accept loans that were originated under the previously announced terms, if funded before June 10, 2020

ICSC will continue to advocate for further changes to the MSLP. These include, among other things, removing the SBA 7(a) ineligible businesses rules to include owners of real estate and waiving the dividend prohibition for REITs. For more information, click here.

We will continue to provide regular policy updates to you as events unfold. Thank you for your membership.

Sincerely,

Tom McGee
President & CEO 
ICSC