Federal Reserve Releases Additional Information for Potential Main Street Lending Program (MSLP) Borrowers and Lenders
On May 27, 2020, the Federal Reserve Bank of Boston released extensive additional information and materials for potential borrowers and lenders in the Main Street Lending Program (MSLP), including program instructions, a form loan participation agreement, lender certifications and covenants, borrower certifications and covenants, significantly expanded Frequently Asked Questions (FAQs) and other legal documents. The Federal Reserve confirmed it will not provide form loan agreements for eligible lenders to use when making MSLP loans to eligible borrowers. However, loan agreements related to any MSLP loan must reflect the program terms and include the items set out in the loan document checklist contained in Appendix A of the MSLP FAQs. The “go live” date for the MSLP was not announced or included in the release of new information and materials.
According to the Federal Reserve, the non-forgivable MSLP loans are intended to help companies that were in sound financial condition prior to the onset of the COVID-19 pandemic maintain their operations and employment until they have recovered from, or adapted to, the impacts of the pandemic. As discussed in our previous webinars (here and here), U.S. businesses may be eligible for MSLP loans if they meet either of the following conditions: (i) the business has 15,000 employees or fewer or (ii) the business had 2019 revenues of $5 billion or less. Loans issued under the MSLP would generally have a four year maturity, with principal and interest payments deferred for one year.
The Miller Johnson team intends to host a webinar to discuss these and any further MSLP-related developments in more detail during the week of June 1-5, 2020.