MAIN STREET LENDING PROGRAM
Member FDIC 20-0225 / rev 061020
As a result of the Coronavirus Aid, Relief & Economic Security (CARES) Act, the Federal Reserve has created the Main Street Lending Program to provide a total of $600 billion in financing for small and medium-sized businesses.
The Main Street Lending Program offers three different secured or unsecured 5-year term loan options set at an adjustable rate of LIBOR (1 or 3 month) plus 300 basis points with principal and interest payments deferred for one year for eligible borrowers. Unlike Paycheck Protection Program (PPP) loans, Main Street loans are full-recourse loans and are not forgivable.
All loans under the Main Street Lending Program must allow prepayment without penalty. All loans are made by private financial institutions but backed by the Federal Reserve.
Eligible borrowers must have less than 15,000 employees or less than $5 billion in revenue, must have significant U.S. operations, and must not be an ineligible business per SBA regulations.
EBITDA: Earnings before interest, tax, depreciation and amortization LIBOR: London Interbank Offer Rate, a common benchmark interest rate index
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MAIN STREET LENDING PROGRAM LOAN OPTIONS
Main Street New Loan Program Main Street Priority Loan Program
Term 5 years 5 years
Minimum Loan Size $250,000 $250,000
Maximum Loan Size Lesser of $35,000,000 or 4x 2019 adjusted EBITDA
Lesser of $50,000,000 or 6x 2019 adjusted EBITDA
Loan Held By Bank 5% 5%
Loan Participation to Fed SPV 95% 95%
Amortization (two years deferred for all) Years 3-5: 15%, 15% and 70% Years 3-5: 15%, 15% and 70%
Rate LIBOR + 3% LIBOR + 3%
Lender Transaction Fee (Paid by Borrower) 1.0% of loan amount 1.0% of loan amount
Borrower Origination Fee 1.0% of loan amount 1.0% of loan amount
Your City National Banker is just a phone call away or call us at 305-448-6500.
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