Association of Progressive Rental Organizations

Main Street Lending Program Opens and Expands Terms

The Main Street Lending Program recently changed its loan requirements to include a lowered minimum loan amount, a raised maximum loan limit, an adjusted principal repayment schedule beginning after two years, and an extension of the term to five years. These changes from the Federal Reserve (Fed) last week further the program’s intention – to support small and medium-sized businesses affected by COVID-19 – to become even more inclusive through its three different loans. In addition to these changes, this week, the Fed opens the program for lender registration and asked lenders to start making program loans immediately. 

“Supporting small and mid-sized businesses so they are ready to reopen and rehire workers will help foster a broad-based economic recovery,” Federal Reserve Chair Jerome Powell said. “I am confident the changes we are making will improve the ability of the Main Street Lending Program to support employment during this difficult period.”

After taking three months from design, build and launch by the Fed, at a time when unemployment reaches vast heights, the program is welcomed. The Main Street Lending Program is a departure from the Fed’s role, a lender to the banking sector, to support the economy.

The program’s updates include:

  • Lowering the minimum loan size for certain loans to $250,000 from $500,000;
  • Increasing the maximum loan size for all loans;
  • Increasing the term of each loan option to five years, from four years;
  • Extending the repayment period for all loans by delaying principal payments for two years, rather than one; and
  • Raising the Reserve Bank’s participation to 95% for all loans.

The chart explains the three loans and their changes.

Main Street Lending Program Loan OptionsNew LoansPriority LoansExpanded Loans
Term5 years
(previously 4 years)
5 years
(previously 4 years)
5 years
(previously 4 years)
Minimum Loan Size$250,000
(previously $500,000)
$250,000
(previously $500,000)
$10M
Maximum Loan SizeThe lesser of $35M, or an amount that, when added to outstanding and undrawn available debt, does not exceed 4.0x adjusted EBITDA
(previously $25M)
The lesser of $50M, or an amount that, when added to outstanding or undrawn available debt, does not exceed 6.0x adjusted EBITDA
(previously $25M)
The lesser of $300M, or an amount that, when added to outstanding or undrawn available debt, does not exceed 6.0x adjusted EBITDA
(previously $200M)
Risk Rentention5%5%
(previously 15%)
5%
Principal RepaymentPrincipal deferred for two years, years 3-5: 15%, 15%, 70%

(previously principal deferred for one year and 33.33% repayment due in years 2-4)
Principal deferred for two years, years 3-5: 15%, 15%, 70%

(previously principal deferred for one year and 15%, 15%, 70% repayment due in years 2, 3, and 4, respectively)
Principal deferred for two years, years 3-5: 15%, 15%, 70%

(previously principal deferred for one year and 15%, 15%, 70% repayment due in years 2, 3, and 4, respectively)
Interest RepaymentsDeferred for one yearDeferred for one yearDeferred for one year
RatesLIBOR + 3%LIBOR + 3%LIBOR + 3%

The Fed has committed to remaining transparent about its program to the public. Interested borrowers can search for lenders through the Fed’s website and resources. 

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Mike Tissot

Countryside Rentals Inc., dba Rent-2-Own

Mike grew up in the rent-to-own industry under the guidance of his father, former APRO President and RTO legend Darrell Tissot. For nearly 25 years, Mike’s innovative leadership has helped expand the family business to more than 40 stores across Ohio and Kentucky while also shaping the industry as a whole.

He has served as President of the Ohio Rental Dealers Association, an APRO board member and Treasurer, and President and Treasurer of the TRIB Group. His contributions have earned him the APRO President’s Award of Excellence and the title of APRO Rental Dealer of the Year.

Outside of RTO, Mike enjoys time at the lake house or in Orange Beach, Alabama, with his girlfriend, Angela Strong McCool. A passionate Cincinnati Reds fan, he rarely misses a game, whether watching or listening alongside his parents. He also takes every opportunity to visit Arizona, where his daughter is currently attending Arizona State University.