The Federal Reserve has yet to announce a start date for the $600 billion Main Street Lending Program established under the CARES Act. However, the Window & Door Manufacturers Association encourages small and mid-sized businesses interested in taking advantage of the Program to prepare for applying now by reviewing the Eligible Borrower requirements.
The Program offers three different secured or unsecured four-year term loan options with principal and interest payments deferred for one year for eligible borrowers. Though the Program cap is substantial, the program is open to U.S.-based businesses with up to 15,000 employees or 2019 annual revenues up to $5 billion, so the cap could be met quickly, according to WDMA. Interested businesses should be prepared to apply immediately once a start date is announced.
WDMA also encourages interested businesses to check with lenders regarding whether they plan to participate in the Program and, if so, to request more information on their application process under the Program.
WDMA provides the following overview:
The Program was established by the Federal Reserve to increase the availability of credit for small and medium-sized businesses that were in sound financial condition before the onset of the COVID-19 pandemic and are now in need of financial assistance. The Program is designed to provide support to small and medium-sized businesses across the United States during the current period of financial strain by supporting the provision of credit to such businesses.
To implement the Program, the Federal Reserve will purchase up to $600 billion in participations in loans originated by Main Street eligible lenders and made to small and mid-sized businesses that also meet certain Main Street eligibility requirements. Unlike Paycheck Protection Program loans, Main Street loans are full-recourse loans and are not forgivable.
WDMA compiled a summary document for members who are seeking additional information about the Program.