Yesterday, the Federal Reserve released a list of banks participating in the Main Street Lending Program and accepting new customers.  The press quickly went on the attack that Bank of America is the only top 5 bank in the country that is willing to take new customers, comparing the program to the early days of the PPP.

Let’s get some facts clear.

Participating banks were given the option to opt-in if they wanted their name included in the list. I know of many banks that are actively participating in the Main Street Program but did not want their names on the list.  These banks are not interested in having their phones ring off the hook with unqualified borrowers.  They elected not to be listed.

Secondly, it is essential to note that if your business has been hit by Covid-19 and interested in a Main Street Lending Program loan, your best bet will be with your existing bank, especially if you already have debt with them.  There are plenty of reasons for banks to provide you with some additional debt in these situations, assuming that you had a healthy 2019 and have the capacity of your balance sheet to take on other debt. 

If you are looking for a Main Street loan and a new lender, your lender will be taking on risk with your loan (unlike the PPP).   The lender does not stand to make a lot of money with the program.  In most cases, they will want your banking relationship or some additional loan to produce yield.

For the interested in learning more about the Main Street Program, I will be giving an Aminar at noon EST today.