Borrower and lender accounting for Main Street Lending Program loans
FINANCIAL REPORTING INSIGHTS |
Authored by RSM US LLP
The Coronavirus Aid, Relief, and Economic Security Act established the Main Street Lending Program (MSLP), under which eligible borrowers and eligible lenders enter into specific lending facilities authorized by the Board of Governors of the Federal Reserve System (the Federal Reserve Board). The lenders may then transfer up to a 95% loan participation interest in an MSLP loan to a special purpose vehicle established and funded by the U.S. Department of the Treasury and operated by the Federal Reserve Bank of Boston. The MSLP is intended to provide low-interest loans to small- and medium-sized businesses and not-for-profit entities that were in sound financial condition prior to the coronavirus pandemic, but need additional credit to maintain their operations and payroll during the pandemic. We have updated our white paper, Coronavirus: Financial reporting considerations, to include discussion of MSLP loans and how they should be accounted for by both borrowers and lenders.
This article was written by RSM US LLP and originally appeared on 2020-10-21.
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