Commercial > COVID-19 updates > Main Street Lending Program

On April 9, 2020, The Federal Reserve announced actions to provide up to $2.3 trillion in loans to the economy through several different programs. One of those programs is the $600 billion Main Street Lending Program (MSLP). It is intended to support U.S. companies with up to 15,000 employees or annual revenues of up to $5 billion that were in sound financial condition before the COVID-19 crisis and require financing due to unprecedented circumstances brought about by the crisis.

Since the release of the first term sheets, the Federal Reserve has continued to update these and other documents that help explain the Program and the responsibilities of borrowers and lenders.  Please visit the Federal Reserve MSLP homepage, which includes detailed term sheets and FAQs, and the Federal Reserve Bank of Boston MSLP homepage for real time program updates and other critical documents including Borrower Certifications and Covenants. 

At this time, Lender registration is open and The Federal Reserve is currently working to create the infrastructure necessary to fully operationalize the Program for businesses (borrowers). In the meantime, we’ve compiled high level summary answers to some Frequently Asked Questions below. 

The Main Street Lending Program information contained in the FAQs on this page is not exhaustive. Businesses (borrowers) should review the full set of eligibility requirements, restrictions, conditions and attestations, including the Borrower Certifications and Covenants and required Financial Reporting, published by the Federal Reserve Board (including all updates thereto). Businesses (borrowers) should also consult with their own legal, tax, and business advisors. 

Frequently Asked Questions

What are the terms of the various MSLP Loans?

Here is a brief summary of the key loan terms for MSLP.

Term
Main Street Lending New Loan Facility (MSNLF)
Main Street Lending Priority Loan Facility (MSPLF)
Main Street Lending Expanded Loan Facility (MSELF)
Maturity
5 years
Principal Deferral
2 years
Capitalization of Unpaid Interest
Yes
Interest Payments
Deferred for 1 year
Interest Rate
Adjustable rate of LIBOR (1 or 3 month) + 300 basis points
Principal Amortization Schedule
  • 15% at the end of the third year
  • 15% at the end of the fourth year
  • A balloon payment at maturity at the end of the fifth year

Minimum Loan Size
$250,000
$250,000
$10 million
Maximum Loan Size
The lesser of (i) $35 million or (ii) an amount that, when added to the Eligible Borrower’s existing outstanding and undrawn available debt, does not exceed four times the Eligible Borrower’s adjusted 2019 EBITDA
The lesser of (i) $50 million or (ii) an amount that, when added to the Eligible Borrower’s existing outstanding and undrawn available debt, does not exceed six times the Eligible Borrower’s adjusted 2019 EBITDA
The lesser of (i) $300 million or (ii) an amount that, when added to the Eligible Borrower’s existing outstanding and undrawn available debt, does not exceed four times the Eligible Borrower’s adjusted 2019 EBITDA

For full details on the terms of each MSLP loan, please reference the Term Sheets (as of 6/8/20) provided by the Federal Reserve:

What are the eligibility requirements for the Main Street Lending Program?

Please reference the Federal Reserve site for full program details, including eligibility. Here are a few of the key MSLP eligibility requirements.

  • Business (borrower) was established prior to March 13, 2020
  • Business (borrower) has either less than 15,000 employees or had less than $5 billion in 2019 annual revenue. (In each case tested in the aggregate with its affiliates using SBA affiliation rules)
  • Business (borrower) has significant operations in and a majority of its employees in the United States.
  • Must not be an Ineligible Business as listed n 13 CFR 120.110(b)-(j) and (m) - (s), as modified by the regulations implementing the Paycheck Protection Program on or before 4/24/20.
  • Business (borrower) loans must have had an internal “pass” risk rating as of 12/31/2019.
  • Business (borrower) must be able to make all of the certifications and covenants required under the Main Street Lending Program. See the MSNLF (PDF), MSPLF (PDF), and MSELF (PDF) Borrower Certifications and Covenants for more information.

Businesses (borrowers) are encouraged to seek advice from their own legal, tax and business advisors. 

If a business meets the MSLP eligibility requirements, does that mean the business will be approved for a loan?

No. Businesses (borrowers) that otherwise meet the MSLP requirements may not be approved for a loan or may not receive the maximum allowable amount.

Wells Fargo Bank, N.A. (“Bank”) will apply its own underwriting standards in evaluating the financial condition and creditworthiness of a business (borrower) and may require additional information and documentation in making this evaluation and decision on loan approval.

Are there program restrictions or conditions imposed on the borrower?

Yes. The Main Street Lending Program does have certain restrictions and conditions, including, but not limited to:

  • The business (borrower) will not pay dividends (other than to pay required tax obligations of its owners if the Borrower is a pass-through entity), repurchase any of its equity or make capital distributions on common equity until 12 months after the Main Street Loan is repaid.
  • The business (borrower) must comply with the following compensation limitations until 12 months after the Main Street Loan is repaid:
    • For any non-union employee or officer whose 2019 total compensation exceeded $425,000, total compensation for any 12-month period may not exceed 2019 total compensation levels.
    • For any employee or officer whose 2019 total compensation exceeded $3.0 million, total compensation for any 12-month period may not exceed the sum of (i) $3.0 million plus (ii) 50% of the excess over $3.0 million.
    • For any person in either of the above categories, severance upon termination may not exceed two times 2019 maximum total compensation.

Businesses (borrowers) should review the full set of eligibility requirements, restrictions, conditions and attestations, including the Borrower Certifications and Covenants and required Financial Reporting, published by the Federal Reserve Board (including all updates thereto).

Will participation in the MSLP be made public?

Yes. The Federal Reserve will disclose information regarding the MSNLF, MSPLF, and MSELF during the operation of the facilities, including information regarding names of lenders and borrowers, amounts borrowed and interest rates charged, and overall costs, revenues and other fees.

How can I apply for a Main Street Lending Program loan through Wells Fargo?

First, we encourage you to familiarize yourself with the full program details. If you think a Main Street Lending Program loan may be a fit for your business, contact your Wells Fargo relationship manager. For other questions, email us at mainstreetquestions@wellsfargo.com.