November Advocacy Update
GET OUT AND VOTE!!!
Don't miss our Town Hall on November 18, 2020 at 12 PM ET.
UPDATES FROM FEDERAL RESERVE SYSTEM
This week the Main Street Lending Program Announced Adjusted terms including:
- The minimum loan size for three Main Street facilities available to for-profit and non-profit borrowers has been reduced -- to $100,000 from $250,000 – and the fee structure has been adjusted to encourage the provision of these smaller loans.
- A new frequently asked question clarifies that Paycheck Protection Program loans of up to $2 million may be excluded for purposes of determining the maximum loan size (given limits on debt-to-earnings), if certain requirements are met – which should also help smaller businesses access Main Street loans.
Loans originated under the program have several features that can help borrowers facing challenges. The program involves 5-year loans, with floating rates, and principal payments deferred until year three and interest payments deferred until year two – all to assist those experiencing temporary cash flow interruptions stemming from the pandemic.
Interested borrowers (small and medium-sized for-profit businesses and nonprofit organizations) work with an eligible lender to determine if they meet the program requirements as well as the lender’s underwriting standards. The lender will determine approval for a loan. The Fed will participate in the lending by purchasing a 95% interest in the loan, and the lender retains 5%.
Want to hear more about NAWBO Advocacy efforts or get involved? Contact Elle Patout via email at firstname.lastname@example.org.