Find Out if Your Company is Eligible for New Federal Lending Program
NFSA is happy to share that there are additional federal lending programs available. For those who are following our updates, you know that we have tried to keep you updated with the latest information. We are hopeful that many of you are able to take advantage of some or all of these programs, we appreciate those who have let us know you’ve used the information gathered and turned your applications in!
The Federal Reserve has announced a new series of loan options which extends eligibility to more fire sprinkler contractors, suppliers, and manufacturers. The Main Street Lending Program makes federal lending available to more NFSA members than the programs available through the Small Business Administration (SBA). Find a brief summary of the previously announced loans available through the SBA here.
There may be some NFSA members who are eligible for loans under both the SBA programs and the Main Street Lending Program, while others will only be eligible for loans from one program or the other. To assure that you take advantage of all available opportunities, it is important to review the details of each program separately.
These new Main Street Lending Program loan options are effective immediately. The Fed has indicated that these new programs are intended for employers and households of all sizes, to assist state and local governments in providing services during the COVID-19 pandemic.
One of the key features of the new programs is the Main Street Lending Program. This program will facilitate four-year loans totaling up to $600 billion to businesses, with principal and interest payments to be deferred for one year. Specifically, such loans will be available for companies employing up to 10,000 workers or with revenues of less than $2.5 billion. The Fed’s announcement indicates that companies needed to be in good financial standing before the COVID-19 crisis in order to be eligible. There is also flexibility for eligible banks to either originate new Main Street loans or expand the amount of pre-existing loans.
The minimum loan amount under the Main Street Loan Program is $1 million, and the maximum amount will vary based on whether it is a new loan or an increase in the size of an existing loan. Loans under this program may be offered by any US-insured depository institution, bank holding company, or savings and loan holding company.
Employers seeking loans under the Main Street Lending Program will be expected to make reasonable efforts to maintain payroll and retain workers. There are also restrictions regarding compensation, stock repurchase, and dividends that apply to direct loan programs under the CARES Act. Employers are encouraged to review these company-specific details with your financial and other applicable advisors. Please click here for the full text of the Federal Reserve’s Press Release.