Federal Reserve rolls out Main Street New Loan Facility, part of $2.3 trillion COVID-19 relief program

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On April 30, the Federal Reserve Board announced an expansion of the Main Street Lending Program, with refinements  including a larger pool of eligible businesses, a lower minimum loan size for certain loans, and the creation of a third loan option. Read our overview. 

The Federal Reserve today announced that, as part of a $2.3 trillion loan program, it was rolling out its much-anticipated Main Street New Loan Facility. This emergency loan program provides up to $600 billion in financing to lenders that make direct, unsecured loans to Main Street businesses impacted by COVID-19. The new loan facility is intended to support medium-sized businesses that have not yet been helped by the $2 trillion economic stimulus package signed into law late last month.

Treasury Secretary Steven Mnuchin has stated that 40,000 mid-sized companies employing 35 million Americans could benefit from this program.



Eligible businesses can have up to 10,000 employees or up to $2.5 billion in 2019 annual revenues.  Each must be a business created or organized in the U.S. or under the U.S. laws; must maintain “significant operations” in the U.S.; and must have most of its employees based in the U.S. Participating borrowers may not participate in other facilities such as the Main Street Expanded Loan Facility (MSELF) or the Primary Market Corporate Credit Facility.  


An eligible loan is “an unsecured term loan made by an eligible lender(s) to an eligible borrower that was originated on or after April 8, 2020.” According to a Federal Reserve release, eligible loans will have the following features:

  • Maximum loan size: The lesser of $25 million or an amount that, when added to the borrower’s existing outstanding and committed but undrawn debt, does not exceed four times the borrower’s 2019 earnings before interest, taxes, depreciation, and amortization (EBITDA)
  • Minimum loan size: $1 million
  • Maturity: 4 years
  • Interest rate: Adjustable rate of SOFR + 250-400 basis points
  • Amortization of principal and interest: Deferred for one year
  • Prepayment: Permitted without penalty
  • Loan Origination and Servicing: “An eligible borrower will pay an eligible lender an origination fee of 100 basis points of the principal amount of the eligible loan,” the release says.  


U.S. insured depository institutions, U.S. bank holding companies, and U.S. savings and loan holding companies are eligible to be lenders.

Additional requirements 

Several other requirements for both the eligible borrower and the eligible lender include a variety of mandatory certifications and attestations. 

To learn more about the Main Street New Loan Facility and other government lending programs for coronavirus-impacted businesses, contact your CohnReznick representative.

Visit our Coronavirus Resource Center for breaking news on tax and legislative updates, as well as industry-specific strategies to help your business deal with disruption brought on by the pandemic.


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Any advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues. Nor is it sufficient to avoid tax-related penalties. This has been prepared for information purposes and general guidance only and does not constitute legal or professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice specific to, among other things, your individual facts, circumstances and jurisdiction. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its partners, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.