Who qualifies for assistance under the Main Street Lending Program?

Any business (profit or nonprofit) with either a maximum number of 10,000 employees or a maximum amount of $2.5 billion in 2019 annual revenues (regardless of the employee count). These businesses must:

  • Be established, operate significantly, and employ a majority of its workers in the United States
  • Have been in good financial standing before the COVID-19 crisis
  • Not otherwise receive adequate economic relief under the CARES Act

What loans are available under the Main Street Lending Program?

There are two types of loan programs available:

  • Main Street New Loan Facility (MSNLF). This applies to new loans to eligible borrowers. The maximum loan amount is $25 million per borrower.
  • Main Street Expanding Loan Facility (MSELF). This is only available to fund increases in previously existing term loans. The maximum loan amount is $150 million per borrower.

How much can a business borrow?

The minimum loan amount for both the MSNLF and MSELF is $1 million.

The maximum loan amount under the MSNLF loan structure is

  • $25 million, or
  • a loan amount that, when added to the borrower’s outstanding debt, does not exceed four times the borrower’s 2019 earnings before interest, tax, depreciation and amortization (EBITDA).

The maximum loan amount under the MSELF loan structure is

  • $150 million, or
  • 30 percent of the eligible borrower’s existing debt, or
  • A loan amount that, when added to the borrower’s outstanding debt, does not exceed six times the borrower’s 2019 EBITDA.

How can a business use the Main Street Lending Program?

The business must first verify it needs the loan due to circumstances that arose as a result of the COVID-19 pandemic and must make a reasonable effort to maintain payroll and retain employees for the term of the loan.

The loan will be used to:

  • Retain at least 90 percent of its employees at full compensation and benefits through September 30, 2020;
  • Restore no less than 90 percent of its workforce that existed as of February 1, 2020; and
  • Restore all compensation and benefits to workers no later than four months after the public health emergency has come to an end.

Is there anything a business CAN’T use Main Street Lending Program loans for?

Yes. A business cannot use the loan to pay dividends or make other capital distributions on common stock, or repurchase an equity security listed on a national securities exchange while the direct loan is outstanding, for the term of the loan and for a period ending one year after the loan is repaid.

Are there any other loan restrictions a business should be aware of?

Yes:

  • The loan must comply with executive compensation restrictions under the CARES Act;
  • The business must not be in bankruptcy;
  • The business must not outsource or offshore jobs for the term of the loan plus two years after completing repayment;
  • The business will honor any collective bargaining agreements for the term of the loan and for two years after completing repayment; and
  • The business will remain neutral in union organizing efforts.

How do I apply for a loan under the Main Street Loan Program?

Application information is forthcoming and is expected to be released the week of April 20. For more information on the Main Street Lending Program, visit the Federal Reserve website.

For additional updates, please visit our resource center, which includes frequently asked questions about Guardian’s response to the COVID-19 pandemic.

Disclaimer

Please keep in mind this information is changing rapidly and is based on our current understanding of the programs and may change.  Although we will monitor and update our online resources as new information becomes available, please do not rely solely on this information for your financial decisions. Visit the Federal Reserve website for more information. You may also want to consult your own tax, legal, financial and accounting advisors regarding your individual situation.

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