THE FEDERAL RESERVE

Main Street Lending Program

Application Period Closed
As of November 30, 2020, Cross River Bank is no longer accepting new applications for the Main Street Lending Program (MSLP) due to the Federal Reserve's deadline for qualifying submissions on December 14, 2020.
Program Details
Cross River MSLP Loan Offerings
  • Up to $35 million through the Main Street New Loan Facility (MSNLF)
  • Up to $50 million through the Main Street Priority Loan Facility (MSPLF)
  • Cross River is not offering the Nonprofit Organization New Loan Facility (NONLF) or Nonprofit Organization Expanded Loan Facility (NOELF)
MSLP Eligibility
  • US businesses established prior to March 13, 2020
  • Fewer than 15,000 employees OR less than $5 billion in 2019 annual revenue
  • Must not be a type of business ineligible for PPP (except with regard to employee count)
  • Maximum combined debt to adjusted 2019 EBITDA is 4 times for MSNLF and 6 times for MSPLF
Cross River MSLP Guidelines
  • Minimum of $2 million in 2019 EBITDA
  • Leverage generally limited to 2-3x 2019 EBITDA for all MSLP facilities
  • Underlying collateral will be considered in loan determinations
  • Use of proceeds will be considered in loan determinations, and any proceeds for acquisition and growth capital will be limited
  • Financial statements must be prepared in accordance with U.S. GAAP, and while third-party audited or reviewed statements are not required, a third-party quality of earnings report may be requested
Loan Term 5 years
Forgiveness MSLP loans are not forgivable
Principal Payments
  • 15% at the end of the third year
  • 15% at the end of the fourth year
  • Balloon payment of 70% at maturity at the end of the fifth year
Interest Rate
Adjustable rate of 3-month LIBOR + 3.00%

Note: MSLP loans must have an interest rate of LIBOR (1-month or 3-month) + 3.00%. All MSLP loans through Cross River will be 3-month LIBOR + 3.00%.
Interest Payments Deferred for one year (unpaid interest will be capitalized)
Prepayment Allowed Yes, without penalty
Fees
  • 1.00% lender transaction fee to the Federal Reserve
  • 1.00% origination fee to Cross River


Important Restrictions
Restrictions on distributions and employee compensation per Section 4003(c)(3)(A)(ii) of the CARES Act apply to all MSLP loans (with certain exceptions for S corporations or other tax pass-through entities to make distributions to the extent reasonably required to cover its owners' tax obligations in respect of the entity's earnings):
  • Borrower will be prohibited from paying dividends or making other capital distributions on its common stock during the term of the loan and for one full year after the date the loan is no longer outstanding
  • Borrower must agree to cap all employee compensation (including salary, stock, and bonuses) for a period ending one year after the loan is repaid as follows: (a) employees receiving more than $425,000 per year cannot receive (i) more compensation than they received in 2019 (except for compensation determined through a collective bargaining agreement entered into prior to March 1, 2020) or (ii) severance pay or other benefits upon termination exceeding twice the 2019 compensation amount; (b) officers or employees receiving more than $3 million per year cannot receive total compensation in excess of (i) $3 million plus (ii) 50% of the excess over $3 million
In addition:

  • Borrower must refrain from repaying the principal balance of, or paying any interest on, any debt until the MSLP loan is repaid in full, unless the debt or interest payment is mandatory and due (existing debt to other lenders may be refinanced at the time of an MSPLF loan origination)
  • Borrower must refrain from canceling or reducing any of its committed lines of credit with any lender (other than at the time of an MSPLF loan origination)
  • Borrower must certify it has a reasonable basis to believe that, as of the date of MSLP loan origination and after giving effect to such 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
Additional eligibility criteria, terms and conditions apply. Eligibility criteria, terms and conditions are subject to change based on the latest updates from the Federal Reserve. Cross River Bank will review each loan using its own internal underwriting procedures and methodologies and may elect not to offer a loan or may elect to offer a loan amount that is substantially below the maximum loan amount allowed under MSLP. Due to recent Federal Reserve guidance requiring all qualifying submissions to be made by December 14th, Cross River Bank is no longer accepting additional applications.
Contact Us
We're here to help. Contact our MSLP experts at mslp@crossriver.com.
Frequently Asked Questions
What is the purpose of the Main Street Lending Program?

The Federal Reserve established the Main Street Lending Program to support availability of credit to small and medium sized businesses that were in sound financial condition prior to the coronavirus pandemic and now need financing to continue operations.

How is the Main Street Lending Program structured?

The Federal Reserve Bank of Boston has established a special purpose vehicle (SPV) to purchase participations in Main Street Lending Program loans originated by participating lenders. The MSLP operates through five facilities: the Main Street New Loan Facility (MSNLF), the Main Street Priority Loan Facility (MSPLF), the Main Street Expanded Loan Facility (MSELF), the Nonprofit Organization New Loan Facility (NONLF) and the Nonprofit Organization Expanded Loan Facility (NOELF). Eligible borrowers may participate in only one of the Main Street facilities and may not also participate in the Primary Market Corporate Credit Facility. In addition, an affiliated group of companies can participate in only one Main Street facility and may not participate in both a Main Street facility and the Primary Market Corporate Credit Facility. Cross River Bank is participating in the MSNLF and MSPLF.

What is the Main Street New Loan Facility?

The Main Street New Loan Facility (MSNLF) offers five-year term loans ranging in size from $100,000 to $35 million. The maximum size of a loan made in connection with the MSNLF cannot, when added to the borrower’s existing outstanding and undrawn available debt, exceed four times the borrower’s adjusted 2019 earnings before interest, taxes, depreciation, and amortization (EBITDA). The loans must not be, at the time of origination or at any time during the term of the loan, contractually subordinated in terms of priority to any of the borrower’s other loans or debt instruments.

What is the Main Street Priority Loan Facility?

The Main Street Priority Loan Facility (MSPLF) offers five-year term loans ranging in size from $100,000 to $50 million. The maximum size of a loan made in connection with the MSPLF cannot, when added to the borrower’s existing outstanding and undrawn available debt, exceed six times the borrower’s adjusted 2019 earnings before interest, taxes, depreciation, and amortization (EBITDA). At the time of origination and at all times thereafter, the loan must be senior to or pari passu with, in terms of priority and security, the borrower’s other loans or debt instruments, other than mortgage debt. Borrowers may, at the time of origination of the loan, refinance existing debt to a lender that is not the Main Street Lending Program lender.

Will the Main Street Lending Program nonprofit facilities be available through Cross River?

The Nonprofit Organization New Loan Facility (NONLF) and Nonprofit Organization Expanded Loan Facility (NOELF) are not available through Cross River.

When is the Main Street Lending Program available?

The Main Street Special Purpose Vehicle (SPV) will cease purchasing loan participations on December 31, 2020, unless the Program is extended by the Board and the Treasury Department. The FRB Boston will continue to operate the SPV after such date until the Main Street SPV’s assets mature or are sold. Due to recent Federal Reserve guidance requiring all qualifying submissions to be made by December 14th, Cross River Bank is no longer accepting additional applications.

Will businesses that meet Main Street Lending Program eligibility criteria be approved for a loan?

Meeting Main Street Lending Program eligibility criteria does not guarantee approval of a loan. Cross River Bank will review each loan using its own internal underwriting procedures and methodologies and may elect not to offer a loan or may elect to offer a loan amount that is substantially below the maximum loan amount allowed under the Main Street Lending Program.

What certifications and restrictions must borrowers adhere to?

There are multiple certifications and restrictions that eligible borrowers must adhere to under the Main Street Lending Program. The certifications for lenders and borrowers also vary depending on which facility through which the borrower is applying for a loan. For more information on which certifications and restrictions may apply to your organization, please contact us at mslp@crossriver.com.

Are PPP loan recipients eligible for the Main Street Lending Program?

Eligible borrowers that have received a Paycheck Protection Program (PPP) loan may also receive a Main Street Lending Program loan. The portion of any outstanding PPP loan that has not yet been forgiven may be counted as outstanding debt for the purposes of the Main Street maximum loan size test. PPP loans of up to $2 million may be excluded for purposes of determining the maximum loan size under the Main Street Lending Program, if certain requirements are met.

Are EIDL recipients eligible for the Main Street Lending Program?

Eligible borrowers that have received or will receive an Economic Injury Disaster Loan (EIDL) advance may also receive a Main Street Lending Program loan.

How can Main Street Lending Program proceeds be used?

The Main Street Lending Program is intended to help small and medium-sized companies that were in sound financial condition prior to the onset of the COVID-19 pandemic maintain operations and payroll until conditions normalize. Loans may not be used for the benefit of a borrower’s foreign parents, affiliates, or subsidiaries; or to refinance or accelerate payment of existing debt (except at the time of origination of an MSPLF Loan if the debt was owed to a different, unaffiliated lender or under the limited exception for mandatory and due principal and interest payments after the origination of the Main Street loan). In addition, borrowers may NOT use any funds (including the proceeds of a Main Street Loan) during the term of the loan and for one year after the Main Street loan is repaid for paying dividends, distributing capital, repurchasing equity, or paying compensation over specified thresholds (with certain exceptions); or for repaying other debt ahead of schedule. For more information, please contact us at mslp@crossriver.com

Is collateral required for Main Street loans?

Collateral may be required for some loans under the Main Street Lending Program. To find out more about the options available to you, please contact us at mslp@crossriver.com.

How should employee count be calculated for eligibility?

Potential borrowers should follow the framework set out in the US Small Business Administration’s regulation at 13 CFR 121.106 to determine employee count. In summary, using the average of the total number of persons employed by the borrower and its affiliates for each pay period over the 12 months prior to the origination of the Main Street loan, potential borrowers should count as employees all full-time, part-time, seasonal, or otherwise employed persons, excluding volunteers and independent contractors.

How can I apply for the Main Street Lending Program through Cross River Bank?

Due to recent Federal Reserve guidance requiring all qualifying submissions to be made by December 14th, Cross River Bank is no longer accepting additional applications.

Ongoing community support

Cross River continues to host and participate in community events designed to promote financial literacy and share information about available resources. We are also proud to have donated hundreds of thousands of pieces of PPE and hundreds of meals to hospitals and medical workers on the frontlines since the start of the COVID-19 pandemic.