Did you know that around 20% of small businesses fail within their year of opening their doors? If you are a business owner and you have been affected by the pandemic and are currently figuring out your options, you are in the right place. Today, we are going to go over what is MSLP and how you can qualify for this lending program.
Keep reading to learn the ins and outs of MSLP.
What Is MSLP?
MSLP stands for Main Street Lending Program and it was established by the Federal Reserve to help support lending to both small and medium businesses, and also to nonprofit organizations. Any of the above that were in good financial conditions before the COVID-19 pandemic qualifies to apply.
This is a $600 billion lending program and it is not to be confused with the PPP.
In order to qualify for this loan, the business has to have less than 15,000 workers and a minimum of 10 employees. The organization also has to be a 501(c)(3) or a 50(c)(19) that has been open for business since January 1st, 2015.
Another qualification is that it has to have 60 days of cash on hand and have less than $3 billion in endowment. If the company also participated in the PPP program they can still apply for the Main Street Loans as long as they follow the restrictions on compensation and dividend payments that apply to the loan programs under the CARES act.
The program operates under five different umbrellas or five facilities at the moment. They are:
- MSNLF – The Main Street New Loan Facility
- NOELF – The Nonprofit Expanded Loan Facility
- MSPLF – The Main Street Priority Loan Facility
- NONLF – The Nonprofit New Loan Facility
- MSELF – The Main Street Expanded Loan Facility
Every program has different requirements and benefits. Those borrowing money can only secure loans from one of these programs.
Make sure to take a look at each facility to decide which one you want to participate in. You can learn even more details right here!
The program offers eligible loans with a five-year repayment plan. The interest rate is 3% plus the London Interbank Offered Rate (LIBOR). The borrower does not have to worry about paying interest for the first year because they are deferred.
The principal payments are also deferred for the first two years. The business borrowing the money has to repay 15% of the loan in the third and fourth years and 70% in the final year of the loan.
Feeling Like an MSLP Pro?
Now that you know what is MSLP and how to qualify, you can make an informed decision whether you want to apply or not. Every lending program the government has put out to help businesses is a little different and the key is to find the one that your business will benefit the most from.
Did this blog post help you out today? Please feel free to browse the rest of our site for some more helpful reads.