Main Street Lending Program | Lead Bank Community Bank

Main Street Lending Program

Unlike the Small Business Administration’s Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP), aimed at smaller businesses and which are both accepting applications, the Main Street program will be the first federal relief program also aimed at larger companies. The Main Street Lending Program will leverage the Treasury’s $75 billion equity investment of CARES Act funds to provide up to $600 billion in new financing to small and medium-sized businesses.  The Federal Reserve Bank will create a special purpose vehicle (SPV) that will purchase, on a recourse basis, 95 percent participations in qualifying loans made under this program, up to $600 billion in total principal amount. The SPV may purchase participations in eligible loans on or prior to September 30, 2020, unless the program is extended.

How it works

  • Who’s eligible?  
      Lead Bank is prioritizing loan applicants from its Kansas and Missouri market area.
    • Borrowers with businesses with 15,000 employees or fewer OR businesses that had 2019 revenues of $5 billion or less.
    • Borrowers with businesses created or organized in the United States or under the laws of the United States with significant operations, and a majority of its employees based, in the United States.
    • Borrowers with businesses with positive earnings before interest, taxes, depreciation, and amortization (EBITDA) for calendar year 2019.
    • Borrowers that have taken advantage of the Payroll Protection Program (PPP) may also take out Main Street loans.
    • Borrowers that receive new loans through the Program may not also receive increases in existing loans under the Program (and vice versa).
    • Borrowers under this Program also may not participate in the Primary Market Corporate Credit Facility.
    • Click here for a list of businesses that are ineligible for SBA loans.

  • Who can make Main Street Loans?  Eligible lenders, like U.S. insured depository institutions, U.S. bank holding companies, and U.S. savings and loan holding companies - primarily large banks. The process for the Main Street Lending Program loans will be similar to the Paycheck Protection Program loans.
  • What does the loan cover? Borrowers can NOT use the proceeds of the loan to repay other loan balances, or repay other debt of equal or lower priority, with the exception if mandatory principal payments, unless the borrower has first repaid the loan in full. 
  • How is the loan structured? The amount of the secured or unsecured loan can be a minimum of $500,000 and a maximum of an amount equal the lesser of the following amounts, based on the particular loan facility:
    • Main Street New Loan Facility (MSNLF) : $35 million or an amount that, when added to the borrower’s existing outstanding and committed but undrawn debt, does not exceed four times the borrower’s 2019 EBITDA.
    • Main Street Priority Loan Facility (MSPLF) : $50 million or an amount that, when added to the borrower’s existing outstanding and committed but undrawn debt, does not exceed six times the borrower’s 2019 EBITDA.
    • Main Street Expanded Loan Facility (MSELF) : $200 million, 35% of the borrower’s existing outstanding and committed but undrawn bank debt that is pari passu in priority with the Expanded Loan Facility loan and equivalent in secured status, or an amount that, when added to the borrower’s existing debt, does not exceed six times the borrower’s 2019 EBITDA.
      Click here to review the current term sheets published by the Federal Reserve for the MSNLF, MSPLF and MSELF
  • Terms up to five years to repay, and principal and interest payments on the loans will be deferred for up to two years, with 33% payments due in each of the years following that for new loans. Priority loans will see a 15% repayment in the first year and then 70% repayment in years two, three and four.

 
 

EIDL

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