UPDATE: Federal Reserve Board Expands Main Street Lending Program
After receiving extensive public comment during the past month, the Federal Reserve announced on April 30, 2020 that it will expand the scope and eligibility of its Main Street Lending Program (“Program”). The Federal Reserve’s recent action follows the unprecedented steps taken by the Board of Governors of the Federal Reserve on April 9, 2020, to provide up to $2.3 trillion in credit facilities to households, employers, and state and local governments in response to the COVID-19 emergency’s impact on the U.S. economy. Gibbons previously covered these newly announced programs in a client alert. The Program facilitates lending to small and medium sized businesses. The Federal Reserve received 2,200 submissions relating to the Program, and on April 30, 2020 issued two updated Term Sheets and an initial Term Sheet, which are summarized as follows: The Program comprises the Main Street New Loan Facility (MSNLF), the Main Street Expanded Loan Facility (MSELF), and the new Main Street Priority Loan Facility (MSPLF). Below is a side-by-side comparison chart and additional details about the Program. Program Loan Options MSNLF MSPLF MSELF Term 4 years 4 years 4 years Minimum Loan Size $500,000 $500,000 $10,000,000 Maximum Loan Size Lesser of $25M or 4x 2019 adjusted EBITDA Lesser of $25M or 6x 2019 adjusted EBITDA Lesser of $200M, 35% of...