Main Street Lending Program

[cgr]

Main Street Lending Program is now live (as in lenders can sign up and start offering loans).
Detailed write-up available in my signature line.

They're offering great loan amounts (4X or 6X 2019 EBIDTA less outstanding and undrawn debt)
Unimpressed with interest rate (floating rate of 3%+ 1mos or 3mos LIBOR)
Unimpressed with origination fee (1% for most .75% for some large lenders upping existing loans)

Businesses who received a PPP or EIDL loan are eligible.
It is unclear if sole proprietors are eligible.
Businesses operating in certain industries (banking, life insurance, gambling, illegal activities, etc) are ineligible, same as with PPP/EIDL.
Unlike EIDL (but along the lines of PPP) passive income entities (such as developers and landlords) are ineligible.

[rivkao]

Main Street Lending Program is now live (as in lenders can sign up and start offering loans).
Detailed write-up available in my signature line.

They're offering great loan amounts (4X or 6X 2019 EBIDTA less outstanding and undrawn debt)
Unimpressed with interest rate (floating rate of 3%+ 1mos or 3mos LIBOR)
Unimpressed with origination fee (1% for most .75% for some large lenders upping existing loans)

If the business received an EIDL, is it eligible for this loan?

[cgr]

If the business received an EIDL, is it eligible for this loan?

Updated post.

[AsherO]

Main Street Lending Program is now live (as in lenders can sign up and start offering loans).
Detailed write-up available in my signature line.

They're offering great loan amounts (4X or 6X 2019 EBIDTA less outstanding and undrawn debt)
Unimpressed with interest rate (floating rate of 3%+ 1mos or 3mos LIBOR)
Unimpressed with origination fee (1% for most .75% for some large lenders upping existing loans)

Businesses who received a PPP or EIDL loan are eligible.
It is unclear if sole proprietors are eligible.
Businesses operating in certain industries (banking, life insurance, gambling, illegal activities, etc) are ineligible, same as with PPP/EIDL.
Unlike EIDL (but along the lines of PPP) passive income entities (such as developers and landlords) are ineligible.

When you say less outstanding an undrawn debt, does that include PPP or EIDL?

Are there any restrictions on what you can use the money on?

[TBD]

Main Street Lending Program is now live (as in lenders can sign up and start offering loans).
Detailed write-up available in my signature line.

They're offering great loan amounts (4X or 6X 2019 EBIDTA less outstanding and undrawn debt)
Unimpressed with interest rate (floating rate of 3%+ 1mos or 3mos LIBOR)
Unimpressed with origination fee (1% for most .75% for some large lenders upping existing loans)

Businesses who received a PPP or EIDL loan are eligible.
It is unclear if sole proprietors are eligible.
Businesses operating in certain industries (banking, life insurance, gambling, illegal activities, etc) are ineligible, same as with PPP/EIDL.
Unlike EIDL (but along the lines of PPP) passive income entities (such as developers and landlords) are ineligible.

Minimum amount is 250K So won't be so easy for everyone to apply.
Interest rate is great as I don't know about any other business unsecured credit line offering such a low rate.

Anyone knows any bank who said already that they will be working with this program?

[TBD]

Regarding main street lending program.

Will it be based on total personal income (1040) or on the business income?
Are mortgages considered outstanding loans that will reduce loan amounts?

[TBD]

Main Street Lending Program is now live (as in lenders can sign up and start offering loans)[/size][/u].
Detailed write-up available in my signature line.

They're offering great loan amounts (4X or 6X 2019 EBIDTA less outstanding and undrawn debt)
Unimpressed with interest rate (floating rate of 3%+ 1mos or 3mos LIBOR)
Unimpressed with origination fee (1% for most .75% for some large lenders upping existing loans)

Businesses who received a PPP or EIDL loan are eligible.
It is unclear if sole proprietors are eligible.
Businesses operating in certain industries (banking, life insurance, gambling, illegal activities, etc) are ineligible, same as with PPP/EIDL.
Unlike EIDL (but along the lines of PPP) passive income entities (such as developers and landlords) are ineligible.

STILL ONLY FOR LENDERS NO IDEA WHEN IT WILL BE OPEN FOR BORROWERS

[cgr]

Regarding main street lending program.

Will it be based on total personal income (1040) or on the business income?
Are mortgages considered outstanding loans that will reduce loan amounts?

It's based on business income (2019 Adjusted EBITDA)

I think (not 100% sure) that mortgages are included in the debt calculation, but unlike all other debt where the Main Street loan takes precedence, it does not take precedence over mortgage debt.

[cgr]

STILL ONLY FOR LENDERS NO IDEA WHEN IT WILL BE OPEN FOR BORROWERS

They're being urged by the Fed to start offering loans as soon as they're signed up. Some are hoping before the week is out.

[TBD]

It's based on business income (2019 Adjusted EBITDA)

I think (not 100% sure) that mortgages are included in the debt calculation, but unlike all other debt where the Main Street loan takes precedence, it does not take precedence over mortgage debt.

Only mortgages taken by the business or personal (residential) mortgages also? Meaning only business debt or all personal debt will be included?

[cgr]

Only mortgages taken by the business or personal (residential) mortgages also? Meaning only business debt or all personal debt will be included?

Business debt only.

This adds further doubt to the open question if sole props will be eligible or not. There is no line between business assets/debt and personal assets/debt.

[cgr]

This adds further doubt to the open question if sole props will be eligible or not. There is no line between business assets/debt and personal assets/debt.

Per FAQ E.2:
How is “Business” defined?
Businesses must be legally formed entities that are organized for profit as a partnership; a
limited liability company; a corporation; an association; a trust; a cooperative; a joint venture
with no more than 49% participation by foreign business entities; or a tribal business concern.
...
Other forms of organization may be considered for inclusion as an Eligible Borrower under the
Program at the discretion of the Federal Reserve.

https://www.bostonfed.org/supervision-and-regulation/supervision/special-facilities/main-street-lending-program/information-for-borrowers.aspx

[helpusout]

anyone have info on how to apply for main street lending program?

[cgr]

anyone have info on how to apply for main street lending program?

This is being discussed on the SBA PPP/EIDL thread but basically you need to apply through an approved bank. The Fed will not administer these loans directly.

Banks only started signing up today so hopefully in a few days we'll see a published list.

[AsherO]

Consolidated MSLP discussion into a new thread so it doesn’t further confuse what’s going on in the PPP/EIDL thread

[helpusout]

any news on where to apply for main street lending program?

[cgr]

any news on where to apply for main street lending program?

Fed hasn't released a list of approved banks yet.

These banks make mention of it but no update on the application process yet:
https://www.jpmorgan.com/commercial-banking/covid19-your-guide-to-navigating-economic-uncertainty
https://www.wellsfargo.com/com/focus/covid19-main-street-lending/

[Am]

Because the Fed is only guaranteeing 95% of the loan banks are doing full underwriting. They are also limited with how much they can make off each loan so banks are very not interested in this whole thing. Chase is only doing it if you can provide collateral of an owner occupied property that doesn't have any debt on it. It short, you'll be able to count on your fingers how many loans they actually do in the entire country.

Please post if you know of a bank that actually has interest in doing these loans.

[cgr]

Because the Fed is only guaranteeing 95% of the loan banks are doing full underwriting. They are also limited with how much they can make off each loan so banks are very not interested in this whole thing. Chase is only doing it if you can provide collateral of an owner occupied property that doesn't have any debt on it. It short, you'll be able to count on your fingers how many loans they actually do in the entire country.

Please post if you know of a bank that actually has interest in doing these loans.

My understanding is that MSNLF and MSPLF loans can be unsecured, and that only MSELF Upsized Tranches must be secured. Of course finding a bank to do that might still be an issue.
I'm wondering if the Fed will revise the terms to give the banks less leeway as to what must be required seeing that there's so little enthusiasm.

[cgr]

Here's a link to the Feds list of approved banks:
https://www.bostonfed.org/supervision-and-regulation/supervision/special-facilities/main-street-lending-program/information-for-borrowers.aspx#map