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Main Street Lending Program Quick Update


The Main Street Lending Program (“MSLP”) is continuing to evolve. This quick update provides information on some important changes.


Program Date


The program date has been extended from September 30, 2020 to December 31, 2020. Businesses and their lenders will be able to continue to apply and fund under this program past the original closing date of around September 30, 2020. The three month extension, to December 31, 2020, is a welcome change for businesses working to apply and close MSLP loans.


The program specifics related to not-for-profit entities and for tribal entities have been clarified.


Not-For-Profit Entities


Some of the important financial performance requirements for not for profit entities are:


  • Continuous operations since January 1, 2015.

  • 15,000 or fewer employees OR 2019 annual revenues of $5 million or less.

  • At least 10 employees.

  • Endowment of less than $3 billion.

  • Total non-donation revenues equal to or greater than 60% of expenses for the period from 2017 to 2019.

  • Adjusted 2019 earnings before interest, depreciation and amortization compared to unrestricted operating revenue must be greater than or equal to 2%. EBIDA / Unrestricted Operating Revenue >= 2%.

  • Liquid assets at origination of the MSLP loan / Average Daily Expenses >= 60 days.

  • (Unrestricted cash + Investments / Existing outstanding and undrawn debt + the MSLP debt + CMS Accelerated and Advance Payments) > 55%.


Additional loan information is:


  • 5 year maturity.

  • Deferred principal for two years.

  • Deferred interest for one year (will be capitalized).

  • Rate is LIBOR + 300 basis points.

  • Minimum loan size of $10 million.

  • Maximum loan size is the lesser of $300 million or average 2019 quarterly revenue.

  • No prepayment penalty.


Please note that other MSLP program requirements are also part of the approval process. Loan classification, required certifications and covenants, and other requirements of the MSLP loan programs apply to not for profit entities.


Tribal Businesses


The Federal Reserve Bank of Boston has issued new guidance on tribal businesses related to the MSLP loan programs.


Tribal business concerns must be a separate and distinct legal entity from the tribal government, and must be organized or chartered by a tribe, a Federal authority or a state authority. The tribal business must have waived its sovereign immunity with respect to the MSLP transaction.


Tribal businesses generating legal gambling revenue are eligible under the MSLP if they otherwise qualify under eligibility rules.


The prohibition of payments of dividends is waived to allow tribal businesses that are wholly or majority owned by tribal governments to make distributions to the tribal government owners.


In Summary


Please continue to access our website and read our email updates related to the important provisions of the CARES Act and the ever ongoing evolution of the programs.


Call any of us at any time. We are ready to help.


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