On April 9, 2020, the Federal Reserve announced two new loans under the Main Street Lending Program to provide $600 billion in financial relief to small and mid-sized businesses. These two new loans – the Main Street New Loan Facility and the Main Street Expanded Loan Facility – are authorized under section 13(3) of the Federal Reserve Act. Here is the first look at these two new loans.
THE MAIN STREET NEW LOAN FACILITY (MSNLF)
What Business is Eligible for a Main Street New Loan?
Clarifications are still awaited on whether independent contractors, part-time, and other basis employees are included as employees, and also, whether affiliation exclusions apply as per the Rules enacted under the Paycheck Protection Program.
What are the Terms of the Main Street New Loan?
What Assurances Does a Business Need to Provide for a Main Street New Loan?
In addition to certifications required by law, the following commitments are required from a business for each Main Street Loan:
What Is the Application Fee and Process for a Main Street New Loan?
THE MAIN STREET EXPANDED LOAN FACILITY (MSELF)
What Business is Eligible for a Main Street Expanded Loan?
Eligibility requirements are the same as the Main Street New Loan.
What are the Terms of a Main Street Expanded Loan?
Terms are the same as the Main Street New Loan for the upsized tranche of the loan except:
What Assurances Does a Business Need to Provide for a Main Street Expanded Loan?
Assurances are the same as the Main Street New Loan for the upsized tranche of the loan except:
The Federal Reserve is accepting comments on the two loan facilities above until April 16, 2020, and may make changes to the terms and conditions listed here. This post is current as of April 14, 2020, and will be revised as updates are received from the Federal Reserve.
AlvaradoSmith will notify clients as soon as changes are publicly announced.
For additional information and questions, please email AlvaradoSmith business attorneys Monisha Coelho firstname.lastname@example.org or 213.629.7024, Tom Zeigler email@example.com or Jerry Ruiz firstname.lastname@example.org. You can also call AlvaradoSmith at 714.852.6800.
DISCLAIMER: The information contained herein is intended for informational purposes only and should not be construed as professional counsel or legal advice. Seek legal counsel for advice with respect to any legal matter. The information in this document may not reflect the most current developments as the subject matter is extremely fluid and may change daily. The content and interpretation of the issues addressed herein are subject to change.