FINANCIAL RELIEF DURING COVID-19 RESOURCE PAGE

In the wake of the COVID-19 pandemic, the Federal Reserve and Treasury have established multiple programs under the CARES Act designed to mitigate economic disruption through providing additional financing options for businesses of varying sizes. 

Main Street Lending Program

One such program is the Main Street Lending Program (“Main Street”), which was designed to facilitate lending to small and medium-sizes businesses which were in sound financial condition prior to the pandemic. Under Main Street, the Federal Reserve Bank of Boston will lend to a Main Street Special Purpose Vehicle (“SPV”). The SPV will then purchase a 95% participation in Main Street loans originated by eligible lenders, while eligible lenders retain 5% of the loans. Main Street loans will be 5-year, full recourse, unforgivable loans ranging between $250,000 and $50 million, and will operate through three facility types (New Loans, Priority Loans, and Expanded Loans), each providing for varying terms and interactions with a Borrower’s current debt. Main Street loans also provide for deferral of principal payments for two years and deferral of interest payments for one year.

Eligible lenders may either originate new loans (under the New Loans and Priority Loans facilities) or upsize existing loans under the Expanded Loans. Borrowers that have received PPP loans are eligible to apply for Main Street loans, and a Borrower must have 15,000 employees or fewer or 2019 annual revenues of less than $5 billion in order to qualify for a Main Street loan.

The Federal Reserve has provided lender registration documents, participation documents, and other various forms on its website (links below). Main Street is currently capped at $600 billion in federal funds, and will cease on September 30, 2020, unless the program is extended by the Federal Reserve and Treasury.

With our robust finance practice, Thompson Coburn can work with both lenders and borrowers to navigate these new programs as they quickly develop and change. We can assist in documenting and advising on each new program and all related issues that banks and companies may face in navigating these unprecedented credit structures.

Most recent FAQs 
Federal Reserve homepage
Term sheets

• Term Sheet: Main Street New Loan Facility
• Term Sheet: Main Street Priority Loan Facility
• Term Sheet: Main Street Expanded Loan Facility
• Main Street Lending Program forms and agreements

Paycheck Protection Program

Title I of the Coronavirus Aid, Relief and Economic Securities Act (the “CARES Act”) created the Paycheck Protection Program (the “PPP”). The PPP loans are made available through qualified lenders and are 100% guaranteed by the Small Business Administration (the “SBA”). Under the PPP, qualifying borrowers may receive forgiveness of some or all of their PPP loans spent on specific expenses (payroll costs, rent, mortgage interest and utilities). To obtain a PPP loan, borrowers must meet eligibility requirements and make certain certifications, including related to the need for the PPP loan. Loan forgiveness depends on a number of criteria, including criteria related to employment levels. To receive forgiveness, borrowers must prepare a PPP loan forgiveness application and submit the application to their lender. Since the enactment of the CARES Act on March 27, 2020, the Treasury Department and the SBA have issued several Interim Final Rules, FAQs and other materials related to this program.  

Thompson Coburn attorneys can help both lenders and borrowers navigate the Paycheck Protection Program and related guidance. 

Government Resources

For detailed information on the Paycheck Protection Program, including applications and frequently asked questions, please see the links to the Treasury Department and SBA websites.

U.S. Department of Treasury
U.S. Small Business Administration