Mainstreet Lending Program
The Coronavirus Aid Relief and Economic Security (CARES) Act created the Main Street Lending Program (MSLP), providing provisions of up to $600 billion to help medium-sized businesses continue to employ and maintain operations during the Corona Virus 19 (COVID-19) worldwide pandemic. The purpose of this program is to provide cash flow and low-interest loans to qualifying businesses to assist in bill payments and keeping liquidity available while the crisis unfolds.
What makes a MSLP Loan Special?
Most bank loans are backed by the federal government. In the case of Main Street Lending Program loans, they are sold to the Federal Reserve. This opens up a new pipeline for cash infusion in qualified businesses. Additionally, principal and interest payments are deferred for the first year which frees up business owners to focus their assets elsewhere while recovering from COVID-19.
Who qualifies for a MSLP Loan?
Businesses with up to 10,000 employees can apply to take part in the MSLP Loan program. The program is designed for small and medium-sized businesses with revenue under $2.5 billion per year. Many businesses can take advantage of this program under the new regulations making it quite competitive, so it is important to make sure your application is not delayed while the funds are still available.
What amounts can be borrowed?
Businesses of 0-10,000 employees can borrow up to four times the earnings before interest, taxes, depreciation, and amortization (EBITDA) with numbers ranging from $1 million to $25 million in loans. Some businesses could qualify for up to $150 million at a six times EBITDA cap, although it is crucial to have an excellent financial advisor assist to maximize your benefit.
How Can Cornerstone Capital Advisors Help?
The MSLP is available to businesses that range from zero to ten thousand employees, making it more widely available and competitive when compared to other COVID-19 relief efforts. The loan amounts are generally higher as well with longer deferred payment periods. Different banks will vary in their terms. Cornerstone Capital Advisors can help you and your business navigate the confusing and difficult application process to negotiate favorable terms for your specific business needs.