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July 20, 2020

Fed Releases New FAQs On Main Street Lending Program

On July 16, the Federal Reserve Bank of Boston released a new set of frequently asked questions (FAQs) for its Main Street Lending Program (MSLP). The new document includes changes made by the U.S. Small Business Administration to the definition of ineligible businesses in relation to its Paycheck Protection Program.

It also provides guidance regarding a number of issues, including:

  • The inclusion of fees in the principal amount of loan;
  • Financial requirements for businesses established in 2020;
  • Fiscal year 2019 financial data;
  • The use of proceeds under Main Street loans;
  • The eligibility of sole proprietorships; and
  • Hedging credit and interest rate risk.

The updated FAQs are here. A more detailed document highlighting the changes in the FAQs is here.

Last week the Fed also announced the program will support greater access to credit for nonprofit organizations that were in sound financial condition prior to the pandemic. The Fed said forms and other documents to support MSLP loans to nonprofits are in development and will be posted soon. Click here to view the term sheets and here to read the Fed’s press release.