Recently, the Federal Reserve established the Main Street Lending Program, allotting $600 billion in loans for small and medium-sized businesses that were in sound financial condition before the onset of the COVID-19 pandemic.
At this time, lender registration is open, and we at Vista Bank are one of the few Texas banks preparing, processing and submitting applications.
Please note, this program is a commercial loan requiring normal underwriting procedures. Given the qualifications, we are focusing on assisting businesses that operate within our Texas footprint. If you are outside the state, please contact a participating lender in your area.
Ready to speak with a lender and get started? Please complete the provided contact form here. Have more questions? Read on to learn more.
In order to be eligible for a Main Street Lending Program loan, a business must:
Have been established before March 13, 2020
Not be an ineligible business according to Small Business Administration (SBA) regulations
Have no more than 15,000 employees or 2019 annual revenues of no more than $5 billion
The SBA’s affiliation rules apply in determining the employee and revenue count
In counting employees, the Main Street Lending Program advises businesses to refer to SBA regulations by counting all full-time, part-time, seasonal, or otherwise employed persons, excluding volunteers and independent contractors
Have been created or organized in the U.S. with significant operations in and a majority of its employees based in the U.S.
Not also participate in one of the other Main Street loan facilities, as well as the Primary Market Corporate Credit Facility
Note: Businesses that received support through the SBA Paycheck Protection Program (PPP) ARE eligible to receive a Main Street loan
Not have received specific support pursuant to the CARES Act (Subtitle A of Title IV for air carriers, air cargo, and businesses critical to national security)
All of the above criteria must be met in order to be eligible. See “Additional Borrower Criteria” section for more information
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 deferred for two years and interest payments deferred for one year for eligible borrowers. All loans under the Main Street Lending Program must permit prepayment without penalty.
If a borrower has outstanding loans with the lender as of December 31, 2019, such loans must have an internal risk rating equivalent to “pass” in the Federal Financial Institutions Examination Council’s supervisory rating system on that date.
Additionally, lenders are expected to conduct an assessment of each potential borrower’s financial condition at the time of application.
In addition to other certifications required by statutes and regulations, the following certifications are required by eligible borrowers:
Borrowers must commit to refrain from repaying principal balance or interest on any debt until the Main Street loan is repaid in full, unless the debt or interest payment is mandatory and due
Borrowers must commit that it will not seek to cancel or reduce any of its committed lines of credit with the Main Street lender or any other lender
Borrower must certify that it has a reasonable basis to believe that, as of the date of origination of the Main Street loan, it has the ability to meet its financial obligations for at least the next 90 days and does not expect to file for bankruptcy during that time period
Borrowers must commit to following compensation, stock repurchase, and dividend restrictions as outlined in the CARES Act for the duration of the loan term plus 1 year
Exception: S-corporations and other tax pass-through entities may continue to make distributions to the extent reasonably required to cover its owners’ tax obligations in respect of the entity’s earnings.
Retention of Employees
Eligible borrowers that participate in any Main Street Lending Program facility should make commercially reasonable efforts to maintain its payroll and retain its employees during the time that the term loan is outstanding. The Federal Reserve further clarifies that to make “commercially reasonable efforts” borrowers should undertake good-faith efforts to maintain payroll and retain employees, in light of its capacities, the economic environment, its available resources, and the business need for labor. Businesses that have already laid-off or furloughed workers as a result of COVID-19 are still eligible to apply for Main Street loans.
Download the Main Street Lending Program FAQ from the Federal Reserve
Reach out to your loan officer or your nearest Vista Bank location with questions.
On July 28, 2020, the Federal Reserve Board extended it's lending programs until the end of the year. Learn More.
On July 23, 2020, the Federal Reserve Board published the Main Street Lending Program’s frequently asked questions for nonprofit lending. View the FAQs here.
On July 17, 2020 the Federal Reserve Board modified the Main Street Lending Program to support greater access to credit for nonprofit organizations such as educational institutions, hospitals, and social service organizations. Nonprofit borrowers can learn more here.
This is the best and most accurate information we have garnered as of the date published. *All provided information is subject to Treasury guidelines and caps that are fluid and subject to change.
Please note, Vista Bank will work diligently to ensure your success in this government loan program. However, loans are only submitted if qualified based on standard underwriting procedures and are not guaranteed to be received as they are limited by the current federal total, and are being addressed on a first come first serve basis by the Treasury, upon approval.
*information sourced from the U.S. Chamber of Commerce and the bostonfed.org between 7/8/20 to current.
I just wanted to reach out again and say thank you so very much for your persistence, diligence, and hard work in processing and getting my SBA loan approved in record time. I don’t believe it could have been done anywhere else as fast as Vista Bank has done it. Vista Bank gets results!