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Main Street Lending Program

As part of our series on the CARES Act, we will provide an overview of the Main Street Lending program. This program has three components (Main Street New Loan Facility, Main Street Expanded Loan Facility, and Primary Market Corporate Credit Facility) aimed at the mid-size business that has sustained a financial hit due to COVID-19. The overall goals of this program are to supplement the PPP loan and EIDL, assist with payroll and provide liquidity. These are evolving programs with FAQs and interim term sheets continuing to be issued.

Companies are eligible to participate in one of the three offerings. They can have received a PPP loan and/or EIDL.

Main Street New Loan Facility (MSNLF):

  • Must be a new loan.
  • Company may have up to 10,000 employees or $2.5 billion in revenue.
  • Any federally insured lending institution may issue the loan.
  • Loan between $1 million and the lessor of $25 million or 4 x 2019 EBITA, less committed and available credit.
  • 4-year term with the P/I deferred the first year.
  • Floating rate.
  • No prepayment penalty.
  • Collateral requirement currently none but may change.
  • 1 % origination fee.
  • No limit on industry or organization type.
  • Conditions:
    • Must need due to COVID-19
    • Make reasonable effort to maintain payroll.
    • May not use proceeds to repay or refinance existing loans.
    • Comply with compensation limits in CARES Act.
    • May not be in bankruptcy.
    • No outsourcing of jobs for 2 years after repayment.
    • No canceling of collective bargaining agreements for 2 years following repayment.
    • Remain neutral in union organizing.

Main Street Expanded Loan Facility (MSELF):

  • Must be used to upsize an existing term loan.
  • Company may have up to 10,000 employees or $2.5 billion in revenue.
  • Any federally insured lending institution.
  • Loan between $1 million and the lessor of $150 million, 30% of available credit, or 6 x EBITA.
  • 4-year term with the P/I deferred the first year.
  • Rate SOFR plus 250-400 basis points.
  • No prepayment penalty.
  • Existing loan must have originated on or before April 8, 2020.
  • Conditions:
    • Must need due to COVID-19.
    • Proceeds not used to repay or refinance existing loans.
    • Neither the lending institution or the company cancel or reduce existing lines of credit.
    • Make reasonable effort to maintain payroll.
    • Comply with CARES Act limitations.

Primary Market Corporate Credit Facility (PMCCF):

  • There is little know about this option.
  • Primarily for investment grade companies.
  • Company must have a commercial rating of BBB- or higher by a national rating company as of 3/23/2020.
  • Allow companies to access funds to maintain business through pandemic.
  • Company issues bonds or syndicated loans and bonds with a maturity of 4 years or less that are purchase by Special Purchase Vehicle.
  • Treasury is making $50 billion available for this initiative.

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Loper Law LLC

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452 Government Street, Suite E
Mobile, Alabama 36602
(251) 288-8308
info@loperlawllc.com