Federal Reserve now accepting lender applications for the new Main Street Lending Program
Phase I of the Main Street Lending Program, lender registration, is now open, the Federal Reserve Bank of Boston announced June 15. The opening of the lender portal allows financial institutions to register to provide Main Street loans to small and medium-sized businesses.
The portal provides interested lenders a secure submission for their applications, certifications, and other necessary legal forms. It also provides important wire instructions that will provide the lenders the ability to transfer information and payments for the Main Street loans.
“Potential loan applicants, as well as lenders, have been eagerly awaiting the final rules and launch of the Main Street Lending Program,” notes Claudine Cohen, Managing Principal of CohnReznick’s Transactions and Turnaround Advisory practice. “While the recent updates made it available to more businesses, the success of the program will ultimately be determined by the banks that register and provide access to these loans.”
Once accepted, lenders can start providing Main Street loans immediately and execute various documents for each loan, such as a servicing agreement, a participation agreement, and a co-lender agreement.
The Main Street Lending Program, a new option for larger businesses affected by the COVID-19 pandemic, offers three types of loans: New, Priority, and Expanded. Businesses with up to 15,000 employees or up to $5 billion in annual revenue are eligible. Lenders will work directly with businesses to determine eligibility and loan approval. Loans can range from $250,000 to $300 million. For term sheets for each loan type, see the Federal Reserve Board’s recent release.
For more information on the Main Street Lending Program and the required information for lenders and borrowers, see the Fed’s updated program Frequently Asked Questions.
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