Archived text snapshot. Source: federalreserve.gov — FEDS Notes, April 16, 2021. Captured 2026-06-27.
Falk Bräuning and Teodora Paligorova — FEDS Notes, April 16, 2021
The Main Street Lending Program (Main Street) was one of several new credit facilities launched by the Federal Reserve and the U.S. Department of the Treasury in response to the COVID-19 pandemic. The Federal Reserve published draft terms on April 9, 2020, and the program started purchasing loan participations on July 6, 2020, with the goal of supporting lending to small and medium-sized businesses that were in sound financial condition before the pandemic. Main Street was intended to support firms often too large to benefit from the PPP and too small to benefit from the corporate bond and commercial paper facilities.
Key for-profit loan terms: lender participation 5% / Fed 95%; interest LIBOR + 300bps; 5-year maturity; principal deferred two years, interest deferred one year. New loans up to $35M (leverage ≤4); priority loans up to $50M and expanded loans up to $300M (leverage ≤6). Eligibility: ≤15,000 employees or ≤$5B 2019 revenue.
Accepted volume rose steadily after the July 2020 launch and accelerated sharply in December ahead of the year-end closure. Total accepted volume across all facilities was $17.5 billion (1,830 loans), roughly half in December. Priority loans dominated at $12.9B (1,173 loans, 74% of volume); new loans $2.7B (616 loans, 15.4%); expanded loans $1.8B (26 loans, 10.3%, avg $69.4M); nonprofit facilities small ($42M / 15 loans). 2,453 borrowers participated. 99% of loans (94% of volume) went to firms reporting under $50M EBITDA. Mean adjusted debt-to-EBITDA was 1.09 before and 4.03 after the Main Street loan, with many firms constrained by the program's maximum leverage ratio rather than size limits — suggestive of unmet credit demand from small firms.
Uptake concentrated in COVID-affected industries (top four: accommodation/food $2.18B; manufacturing $1.71B; real estate $1.66B; mining/oil/gas $1.47B); 71.4% of lending went to COVID-affected industries. Geographic coverage spanned 49 states (all but Maine), DC, and two territories; top states by volume/GDP were Oklahoma, Arkansas, Missouri, Florida. Uptake by state correlated with the prior month's COVID positivity rate. ~600 banks registered but only about half originated; banks with $1B–$50B assets originated 57.7% of loans; the largest banks largely did not participate except for a few large expanded loans.
Although total Main Street uptake was larger than any other Fed debt-purchase facility, it was modest against its ~$600B capacity. Comparing Main Street with comparable Y-14Q bank term loans (≤$300M, nonfinancial borrowers, leverage <6), by end-December 2020 total Main Street volume reached ~60% of comparable Y-14Q loan volume. From early-to-end December, Main Street's biweekly growth outpaced comparable Y-14Q originations, likely driven by the impending closure plus precautionary borrowing. For firms with <$50M EBITDA, Main Street volume by end-December exceeded $16.2B — about two times the comparable Y-14Q volume. Leverage constraints (ratio <6) were particularly binding.
A range of borrowers used the program, with disproportionate uptake by firms facing pandemic-related disruptions. Loans under Main Street totaled about 60% of comparable loans originated by the largest banks while operational. Terms were considered tight — especially the leverage-ratio-≤6 requirement, which prevented many potential borrowers from using the program. Overall, Main Street appears to have added substantially to the supply of credit to medium-sized borrowers, especially those with <$50M EBITDA that likely had limited access to large banks.
Citation: Bräuning, Falk, and Teodora Paligorova (2021). "Uptake of the Main Street Lending Program," FEDS Notes, April 16, 2021. https://doi.org/10.17016/2380-7172.2897