Looking for Additional COVID-19 Relief Funds?
Nov 02, 2020
Main Street Lending Program
On Friday, October 30, the Federal Reserve Board adjusted the terms of the Main Street Lending Program to better support smaller businesses that employ millions of workers and are facing continued revenue shortfalls as a result of the pandemic. The program supports lending to small and medium-sized for-profit businesses and nonprofit organizations that were in sound financial condition before the COVID-19 pandemic but lack access to credit on reasonable terms.
Yet so far the program has made just 400 loans for a total of $3.7 billion — far below the $600 billion in total funding that the Fed has said it is willing to lend. In an effort to boost participation in the program, the Federal Reserve Board made the following changes to ease lending stipulations along with waiving fees.
- Minimum loan amount lowered – The minimum loan size for three Main Street facilities available to for-profit and non-profit borrowers has been reduced from $250,000 to $100,000 and the fees have been adjusted to encourage the provision of these smaller loans.
- Prior loan assistance rules modified – The Fed also tweaked rules about the degree to which prior loan help from the federal government (PPP loans) can be counted in a company’s application, with an eye toward trying to make the Main Street lending program more accessible to small and midsized businesses.
Additional detail about this program can be found at https://www.federalreserve.gov/monetarypolicy/mainstreetlending.htm
For assistance with considering your options under the Main Street Lending Program or with finding a participating lender, contact your WVC advisor.
Economic Injury Disaster Loan (EIDL) – Request a Loan or Increase to Your Existing Loan
When the COVID-19 related EIDL loans were announced, they were capped at $2 million. The SBA was quickly inundated with EIDL applications and capped the loan amount to $150,000. Additionally, the SBA stopped accepted applications for all but agricultural businesses for several months.
EIDL applications were re-opened in June 2020.
Additionally, since EIDL loans are no longer capped at $150,000, you may request an increase to your existing COVID-19 EIDL. To request an increase to your EIDL, log into your EIDL account or send an email that states your need for an increase to the loan amount to firstname.lastname@example.org with the word “INCREASE” in the subject line. Include any additional information that may assist the SBA in considering an increase in your application such as:
- Your most recent Federal income tax return for your business along with a signed IRS Form 4506-T, and /or
- Updated financials (Gross Revenue, Cost of Goods Sold, cost of operation, or other sources of compensation) submitted on SBA Form 3502, and
- An explanation of how COVID-19 has negatively impacted your business and why the additional funds are necessary.
For additional information on how EIDL loan terms and how the funds can be used, view our WVC Short on the topic.