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A second look required for the Main Street Lending Facilities

June 9, 2020 / 2 min read

The Federal Reserve has released additional changes to the Main Street Lending Program, making the program attractive to a wider range of borrowers. Learn more about the major term changes. 

While the Main Street Lending Program (MSLP) has yet to be launched with the registration of lenders or the acceptance of loan applications, the Federal Reserve released changes on June 8, 2020, to expand the three lending facilities, which are:

While many of the terms make the size and repayment structure more attractive to a wider range of borrowers, the certifications and covenants related to executive compensation, dividend payments, and other restrictions remain.

Depending on your situation, these changes may require a second look at the MSLP. Companies may find these loan programs advantageous to build near-term cash reserves, free up working capital, and restructure balance sheets. By doing so, companies may support production ramp-up and sub-tier suppliers, expand current product lines and customer bases, and take advantage of distressed merger and acquisition targets.

MSLP changes to note

Companies investigating the MSLP will see these major differences from the original term sheets:

Next steps

The Federal Reserve hasn’t provided a launch date. The first step is registering the eligible lenders and issuing the application forms. Plante Moran will closely monitor the Federal Reserve and the U.S. Treasury announcements. 

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