The Main Street Lending Program Has Ended: Financing Options in 2026

By Michael D. Rubin, CEO & Founder · Updated September 2026 · 735 words

The Main Street Lending Program is closed: it stopped taking new loans in January 2021, and there is no successor program to apply to. It was an emergency facility created during the COVID-19 pandemic so that banks could lend to companies that had been sound before it, with the Federal Reserve buying most of each loan. The Paycheck Protection Program ended in 2021 as well. Any page still telling you to apply for either is out of date.

What an owner in 2026 needs instead is a clear picture of how companies of this size borrow today, and of how existing debt, including anything left from that period, is handled when the business is sold.

Where established companies borrow now

For a profitable company with $3 million to $100 million in revenue, the ordinary sources are the ones that existed before the pandemic. Which one fits depends on why you are borrowing: lowering payments, funding growth and getting ready for a sale are different goals, and the wrong loan for the goal causes trouble later.

• A commercial bank or credit union. Term loans for equipment, acquisitions or refinancing, and revolving lines of credit for working capital, priced on the company's cash flow and collateral.
• SBA-guaranteed loans. The SBA 7(a) program is widely used for smaller acquisitions and for companies that fall short of a bank's usual collateral rules. Program terms change, so confirm current limits and requirements with an SBA lender.
• Equipment and asset-based lenders. Useful for manufacturers and distributors with machinery, receivables or inventory to borrow against.
• Private capital. Private credit funds, family offices and private equity groups can provide debt or equity, usually at a higher cost and with more conditions.

Debt and a sale: what happens at closing

Most sales of private companies are priced on a cash-free, debt-free basis. The buyer agrees a price for the business as if it had no loans and no surplus cash; at closing, part of the proceeds pays off the company's debt and the seller keeps the excess cash. A bank loan therefore rarely blocks a sale, but it does reduce what you take home. Our answer on how outstanding debt and excess cash are treated when a company is sold shows the arithmetic.

Check two things early. Loan agreements often require the lender's consent to a sale or change of control, and liens on company assets must be released before the buyer can take them. Prepayment fees may also apply, so ask each lender for a payoff figure well before closing rather than the week of it.

Borrowing in the years before a sale

If a sale is two or three years away, think about how new debt will look to a buyer. Borrowing to buy equipment that raises output, or to fund a contract that grows earnings, can add value. Borrowing to cover losses, or refinancing on terms that flatter the monthly numbers while hiding a weak year, will be found in diligence (the buyer's detailed review of the company after a letter of intent).

Keep the paperwork clean: signed loan documents, current statements and a schedule of every obligation, including any personal guarantees you have given. You will want those guarantees released at closing, and the buyer's lender will want to see exactly what is being paid off.

Financing on the other side of the table

Your buyer's financing matters as much as your own. An individual buyer may use an SBA loan, often combined with a seller note, which is part of the price you agree to receive over time with interest. Private equity groups usually combine their own equity with bank or private debt. Strategic buyers, companies already in your industry, may pay from their balance sheet. Knowing how an offer is funded tells you how likely it is to close and whether you are being asked to carry risk after you have handed over the keys.

How MDR & Associates helps with financing

MDR & Associates works alongside your CPA and transaction attorney and can arrange SBA, conventional and seller-financed structures for the buyers of the companies we sell; see business financing. When we review offers with you, we look at how each buyer will pay, not only at the price. If you are weighing a sale against more borrowing, our sell-side representation starts with a free, confidential discovery meeting and opinion of value. Contact us to arrange one.

Where this fitsSell your business in Texas →

Questions owners ask next

Do I have to repay a pandemic-era loan before I sell?

Any balance left on a loan from that period is treated like other company debt. It is normally paid off from the sale proceeds at closing, unless the buyer agrees in writing to take it on. Check the loan documents for consent and change-of-control terms, and ask the lender for a payoff letter early.

Should I refinance before selling my company?

Only if it improves the business on its own terms, such as lowering cost or funding growth. In a cash-free, debt-free sale the buyer does not inherit your loan, so refinancing shortly before a sale rarely raises the price and can add fees. Ask your CPA to compare the payoff cost of each option.