Business Lending Program

Main Street Lending Program1

These are unprecedented, challenging times. Small- and mid-sized companies affected by the COVID-19 pandemic could potentially get help with a loan from the Main Street Lending Program.

Main Street Lending Program at a glance

The Federal Reserve launched the Main Street Lending Program (MSLP) through the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The program allows the Federal Reserve to purchase loans through a special purchase vehicle. These loans are for small- and medium-sized businesses that were in sound financial condition before the onset of the COVID-19 pandemic. Unless it further extends the program, the Federal Reserve will continue to purchase loans until December 31, 2020.

U.S. Bank will initially consider loans under the program for customers with an existing U.S. Bank commercial or business lending relationship in order to support our credit underwriting process. The program requires U.S. Bank to apply our own underwriting standards to evaluate a company’s creditworthiness, including an assessment that evaluates the performance of a company prior to the onset of the COVID-19 pandemic and a company’s outlook following the crisis.

Note: On July 17, 2020, the Federal Reserve published term sheets for two nonprofit loan facilities. However, these facilities are not yet operational. We will update this page as new information becomes available.

Business eligibility requirements

Companies must meet the following minimum eligibility criteria to participate in the Main Street Lending Program:

  • The company must be a U.S. business that was established before March 13, 2020.
  • It must have 15,000 or fewer employees or 2019 annual revenues of $5 billion or less. For information on how to calculate employees and 2019 revenues visit the Federal Reserve FAQ.
  • The business must follow the restrictions outlined in the CARES Act related to stock buybacks, dividends and compensation.

Three lending options for businesses

The Main Street Lending Program includes three different lending options for businesses: Main Street New Loan Facility, Main Street Priority Loan Facility and Main Street Expanded Loan Facility.

The loans share some common features.

  • They are full-recourse and are not forgivable.
  • Terms are five years.
  • Borrowers can prepay the loans without penalty.
  • Principal payments are deferred for two years.
  • Interest payments are deferred for one year, but interest accrues during that time.
  • Eligible borrowers must make commercially reasonable efforts to retain employees during the term of the loans.

There are differences between the three business loans as outlined below.

Main Street New Loan Facility (MSNLF)

Type: Offers borrowers new secured or unsecured term loans

Loan size: Between $250,000 and $35 million; subject to certain leverage limitations

Amortization: 0% year one; 0% year two; 15% year three; 15% year four; 70% year five

Main Street Priority Loan Facility (MSPLF)

Type: Offers borrowers new secured or unsecured term loans

Loan size: Between $250,000 and $50 million; subject to certain leverage limitations

Amortization:  0% year one; 0% year two; 15% year three; 15% year four; 70% year five
 

Main Street Expanded Loan Facility (MSELF)

Type: Offers borrowers the opportunity to upsize their existing secured or unsecured term loans or revolving lines of credit

Loan size: Between $10 million and $300 million; subject to certain leverage limitations

Amortization: 0% year one: 0% year two; 15% year three; 15% year four; 70% year five

Frequently asked questions

Considerations before you apply

The Main Street Lending Program for businesses requires:

  • Participating lenders to follow federal requirements for loan approval
  • Borrowers to meet eligibility requirements, including the minimum requirements listed above
  • Borrowers to commit to provide quarterly and annual financing reporting to the bank
  • Borrowers to be willing and able to comply with the Federal Reserve’s restrictions around officer compensation, stock repurchases and capital distributions. These restrictions continue for 12 months after the MSLP loan is no longer outstanding

Before taking the next step, you should understand:

  • Meeting the Federal Reserve’s eligibility requirements is only the first step.
  • We will apply our own underwriting standards in evaluating your company’s creditworthiness. This includes an assessment of your business and its financial outlook. This assessment requires us to have a deep understanding of your business and your management team, including an assessment of the soundness of your company’s financial condition prior to the onset of the COVID-19 pandemic.
  • You will need to sign a certification that will be reviewed prior to application.

Also, you should carefully consider that the Federal Reserve may publicly disclose information about your company. This includes: 

  • The names of lenders and borrowers
  • The amount borrowed
  • The interest rate
  • Overall costs, revenues and other fees

U.S. Bank will initially consider loans under the program for customers with an existing U.S. Bank commercial or business lending relationship in order to support our credit underwriting process.

Detailed information on the program can be found on the Federal Reserve website or on the Federal Reserve Bank of Boston website. You may choose to review the program with your legal and/or accounting advisors before you apply to determine the impact of program requirements on your business.

Contact us.

Your U.S. Bank relationship manager or banker can walk you through the application process and keep you informed of details about the program as they become available.

Business Banking

For companies with up to $10 million in annual revenue, contact your relationship manager or connect with our Business Banking division.

Corporate & Commercial Banking

For businesses with $10 million or more in annual revenue, contact your relationship manager or connect with our Corporate & Commercial Banking division.