MSLP stands for the Main Street Lending Program, which was initiated by the Federal Reserve in 2020 and was terminated in January of 2021. While this funding is no longer available, we wanted to answer some lingering questions about the program. More importantly, we want to tell you about some alternatives to MSLP, because, as always, we’re invested in your business success.
Is MSLP Still Active?
No, it was terminated in January 2021.
Who Used MSLP and Why?
During the pandemic, MSLP was intended to keep mid-sized US businesses running when other financing options weren’t available.
Are There Alternatives to MSLP?
Yes. If your business could use relief from current economic conditions, here are some funding solutions to consider:
Small Business Administration Loans
These are government-guaranteed loans meant for small to mid-sized businesses. They are typically low-risk, have long maturities, and are familiar to most lenders.
Microloans
The SBA and other qualified lenders may be good sources of microloans, which are small loans ranging from $500 to $50,000. These loans are meant to help very small businesses stabilize or get started.
Grants
This type of funding requires no repayment, but most grants specify how the money is spent. Grants also require businesses to apply (a lengthy process) and meet all criteria to qualify for the specific grant they’re applying for. For instance, there are multiple grant opportunities that cater to minority-owned businesses (such as Black-owned or women-owned), veterans, or underrepresented business owners. Issuers include the SBA, the US Dept. of Commerce, local or state organizations, non-profits, industry-specific initiatives, economic-stimulation groups, and chambers of commerce, among other funders. For more information on federal grants, see: https://www.sba.gov/funding-programs/grants
Private Credit & Bank Lending
Much of private funding and bank lending froze during the pandemic, which was a major reason MSLP was initiated. As this is no longer the case, opting for this source of financial assistance may still be an ideal alternative to MSLP. This source of funding offers flexible terms, no government restrictions, and it’s typically faster for established borrowers.
Capital Markets
This funding is for larger businesses, established businesses. It gives larger firms access to massive capital, but it requires the business to be in good standing, be flexible enough to scale, and have a strong lender who is confident in the business to provide funding in the form of notes, bonds, or syndicated loans.
Regional & State Emergency Programs
These are for location-specific businesses (in your state, county, or city/town). The state in which you have your business guarantees finances or relief funds in the event of an emergency. This funding is deployed relatively quickly and is tailored to local economies. Of course, this type of funding is temporary and only available in times of crisis, and the amounts are typically small.
Lines of Credit
This is a revolving credit you can draw down as needed. LOCs are offered by commercial banks, credit unions, or private lenders. They can provide smooth cash flow to cover contingencies such as payroll, inventory, or emergencies.
What’s The Right Funding For Your Business?
While MSLP is no longer relevant, these alternatives are worth considering, depending on your situation. Just know that for each of these potential solutions, there are various details to factor in to be sure you’re selecting the best funding possible for your business. That’s where TGG can be your ally. Our financial consulting services provide you with details on current financing options and guide you to the best choices for your business type. Reach out to our finance experts today, and let’s keep your business running strong the TGG way.
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Matt Garrett is the Founder and Chief Executive Officer of TGG. He is a regular speaker across the country on behalf of Vistage educating business owners on the need for sound financial practices, and is Vice President of the Board of Directors of FINACA. Under Matt’s leadership, TGG has received the following recognition: INC. 5000 top companies in the U.S. five years in a row; one of “San Diego’s Fastest Growing Companies” the past four years; and is among San Diego’s “Best Places to Work.”