The U.S. Treasury released information today on its Main Street Lending Program (“MSLP”). Many at this point are familiar with the Paycheck Protection Program (“PPP”) created by the CARES Act; the MSLP is being billed as the corresponding mid-size business program. More details are yet to come, however:
- The MSLP will enhance support for small and mid-sized businesses that were in good financial standing before the crisis by offering 4-year loans to companies employing up to 10,000 workers or with revenues of less than $2.5 billion.
- Principal and interest payments will be deferred for one year. Eligible banks may originate new MSLP loans or use MSLP loans to increase the size of existing loans to businesses.
- Firms seeking MSLP loans must commit to make reasonable efforts to maintain payroll and retain workers. Borrowers must also follow compensation, stock repurchase, and dividend restrictions that apply to direct loan programs under the CARES Act. Firms that have taken advantage of the PPP may also take out MSLP loans.
- The Federal Reserve and the Treasury recognize that businesses vary widely in their financing needs, particularly at this time, and, as the MSLP is being finalized, will continue to seek input from lenders, borrowers, and other stakeholders to make sure the program supports the economy as effectively and efficiently as possible while also safeguarding taxpayer funds. Comments and other feedback may be sent to the Treasury until April 16.
If you think your business may benefit from a MSLP loan and would like to submit feedback, please contact your BrownWinick attorney for help in doing so. Additionally, please continue to check www.brownwinick.com as more details on the MSLP become available.