Federal Reserve Reduces Minimum Loan Size for Main Street Lending Program

The Federal Reserve Board adjusted the terms of the Main Street Lending Program. The minimum loan size for three Main Street facilities available to for-profit and nonprofit borrowers has been reduced from $250,000 to $100,000. The fees have been adjusted to encourage the provision of these smaller loans. 

The Board and Department of the Treasury also clarified that Paycheck Protection Program loans of up to $2 million may be excluded for purposes of determining the maximum loan size under the Main Street Lending Program, if certain requirements are met.

To allow borrowers time to recover from the pandemic, the program offers several five-year loan options, with deferred principal and interest payments for qualified businesses and nonprofits. Loan documents reflecting the new terms are expected to be available to registered lenders within the next week.

To date, the Main Street Lending Program has made almost 400 loans totaling $3.7 billion. The program was established with the approval of the Treasury Secretary and with $75 billion in equity provided by the Treasury Department from the CARES Act.