may 28, 2020
- House Introduces Pandemic Risk Insurance Act of 2020 in the Wake of COVID-19 Business Interruption Claims
may 27, 2020
- Hoteliers Beware: a Return to Business Post-Pandemic Brings With It Potential Legal Liability
- House Contemplates Revisions to the Paycheck Protection Program
may 15, 2020
may 14, 2020
- U.S. House Democrats Introduce HEROES Act, a New $3T Stimulus Package
- SAFE Banking Act for Cannabis-Related Businesses Included in the HEROES Act
may 12, 2020
may 8, 2020
- Treasury and the SBA Issue Guidance Regarding the Employee Retention Credit
- Businesses Reopen in Los Angeles County as Stage 2 of California’s Statewide Plan Begins
- Update: Large Employers Required to Pay Coronavirus-Related Sick Leave Under New L.A. County Ordinance
may 6, 2020
- SBA Extends PPP Certification Safe Harbor to May 14
- A 2008 Redux: IRS Provides Temporary Cash/Stock Dividend Relief for Publicly Offered REITs and RICs
- EPLI Insurance and Employee Benefits in the Age of the Coronavirus
may 5, 2020
- Update: PPP Guidance Issued by the SBA and U.S. Treasury at Odds With the CARES Act—Michelman & Robinson Files First-of-Its-Kind Lawsuit Challenging FAQs
- NAIC Issues Business Interruption Data Call in the Wake of COVID-19
may 4, 2020
- PPP Guidance Issued by the SBA and U.S. Treasury at Odds With the CARES Act—Michelman & Robinson Files First-of-Its-Kind Lawsuit Challenging FAQs
may 1, 2020
april 29, 2020
- Planning for Your Employees' Return to the Workplace
- Los Angeles Hospitality Workers Among Those Thrown a Potential Lifeline
april 24, 2020
- Attention Cannabis Businesses: Hope May Be on the Horizon for Federal COVID-19-Related Relief
- California Department of Insurance Issues Notice Granting Tax-Filing Extension in Response to COVID-19
- SEC Approves Amendments to Nasdaq and NYSE Continued Listing Requirements Due to the COVID-19 Pandemic
April 23, 2020
april 21, 2020
- Additional Funding Is on the Way to Resurrect the PPP
- Certifying Your PPP Loan: Proceed With Caution
april 17, 2020
april 16, 2020
- Employment in the Wake of Coronavirus: EEOC and OSHA Guidance Allows Employers to Go Where They Could Not Go Before
- New Yorkers Ordered to Stay at Home Even Longer Amid the COVID-19 Crisis
- Paycheck Protection Program Funds Exhausted
april 15, 2020
- Attention Insurers: the CDI Has Ordered You to Fairly Investigate All Business Interruption Insurance Claims Caused By the COVID-19 Outbreak
April 14, 2020
- Insurance Companies Have Been Ordered to Provide COVID-19-Related Premium Relief to Businesses and Drivers in California
- What to Do If Your New York Business Has Been Deemed Non-Essential
APRIL 13, 2020
- IP Deadlines and Fees Extended Under the CARES Act
- Employment in the Wake of Coronavirus: Reintegrating Your Workforce in the New Normal
APRIL 10, 2020
- You Successfully Applied for and Received a PPP Loan Under the CARES Act: Now What?
- Safer at Home Order in L.A. Extended to May 15
- Maintaining Your Trade Secrets During the Coronavirus Crisis
APRIL 9, 2020
april 8, 2020
- Congress Looks to Bolster the PPP With Another $250B in Funding
- U.S. Treasury Provides Further Guidance to PPP Borrowers and Lenders
- L.A. Mayor Amends COVID-19-Related Paid Sick Leave Ordinance
april 7, 2020
- Clarifying the Paycheck Protection Program: Payment of Insurance Premiums and Loan Forgiveness under the CARES Act
April 3, 2020
april 2, 2020
april 1, 2020
March 31, 2020
march 30, 2020
- Large Employers Required to Pay Coronavirus-Related Sick Leave Under New L.A. Ordinance
- Insurance Coverage Potentially Triggered by COVID-19
- Attention Insurers: CDI Orders Mandatory Call for Business Interruption Coverage Information in the Wake of COVID-19
- DOL Is Requiring Employers to Post Families First Employee Rights Notice
March 27, 2020
- A Comprehensive Guide to Understanding Coronavirus-Related State Assistance Programs: Who is Giving What to Whom (Part II)
- IRS Releases “People First Initiative” Temporarily Adjusting and Suspending Key Compliance Actions
- HHS Relaxing Enforcement of HIPAA to Facilitate Sharing of Information During the COVID-19 Crisis
March 26, 2020
march 25, 2020
march 24, 2020
- Navigating the Coronavirus Pandemic: a Critical Business Review Checklist
- SBA Loans for Companies Impacted by Coronavirus
- SEC Relaxes Federal Proxy Rules for Annual Meetings
march 23, 2020
- Federal Reserve Responds Boldly to Coronavirus-Related Economic Downturn
- The Number of Jurisdictions Implementing Stay-at-Home Orders Is Increasing Exponentially
- Michelman & Robinson’s Guide to Coronavirus-Related Paid Sick Leave and Unemployment Insurance Laws in the Tri-State Area
MARCH 21, 2020
- New Jersey Orders Its Residents to Stay Home
- “Essential Businesses”— What if I am Stopped?
- The IRS and States Provide Tax Relief in the Wake of the Coronavirus Pandemic
MARCH 20, 2020
- New York Governor’s PAUSE Order
- Illinois Governor’s Statewide Stay-at-Home Order
- Force Majeure Clauses in Commercial Real Estate Contracts
MARCH 19, 2020
- SEC Provides Regulatory Relief for Public Reporting Companies
- Student Loan Borrowers Can Breathe a Sigh of Relief, At Least Temporarily
- California Governor's Statewide Stay-At-Home Order
MARCH 18, 2020
- "Shelter in Place" Orders
- Telecommuting in the Age of Coronavirus
- Families First Coronavirus Response Act Just Passed by the Senate and Signed Into Law by the President
MARCH 17, 2020
- M&R Coronavirus Risk Mitigation Team: A Multi-Disciplinary Legal Team Ready To Immediately Address A Host Of Coronavirus-Related Issues for Businesses, Quickly And Holistically
MARCH 16, 2020
MARCH 5, 2020
Fed and Treasury Announce Main Street Lending Program
APRIL 9, 2020
In an ongoing effort to bolster the U.S. economy hit hard by the COVID-19 pandemic, the Federal Reserve and the Department of the Treasury announced this morning the preliminary details of the Main Street New Loan Facility (Main Street Lending Program) authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The Main Street Lending Program is part of a larger $2.3T round of loans, which together seek to provide additional support to small businesses, consumers, and now states and local governments.
What is critical to understand is that the details of the Main Street Lending Program, though made public today, continue to be a work in progress and subject to open comment through April 16, 2020 and subsequent adjustment and revision. In the meantime, Michelman & Robinson answers questions you may have about this new loan facility.
Q. Exactly what is the Main Street Lending Program?
A. As referenced above, the program is officially called the Main Street New Loan Facility, which provides up to $600B jointly established by the Fed and Treasury to qualifying borrowers, who can access loans of between $1M and $25M from eligible lenders (e.g., U.S. insured depositary institutions, U.S. bank holding companies, and U.S. savings and loan holding companies).
Q. What borrowers are eligible for loans under the Main Street Lending Program?
A. Eligible borrowers are businesses with up to 10,000 employees or up to $2.5B in 2019 annual revenues. Likewise, to qualify for a Main Street Lending Program loan, each borrower must be a business that is created or organized in the U. S. (or under U.S. laws), with significant operations—and a majority of its employees—based in the U.S.
Q. In the Main Street Lending Program’s preliminary form (as just announced), what are the anticipated loan terms?
A. Subject to revision once the open comment period ends on April 16, 2020, loans will:
• Be unsecured and originated after April 8, 2020
• Have four-year maturities
• Have interest and principal deferred for one year
• Bear an adjustable interest rate equal to the Fed’s secured overnight financing rate plus between 250 and 400 basis points
• Be eligible for prepayment without penalty
• Be subject to an origination fee payable by the borrower of 100 basis points, and a participation fee payable by lenders of 100 basis points (which a lender may require the borrower to pay)
Q. Are there minimum and maximum amounts for the loans under the Main Street Lending Program?
A. Yes, loans must be for a minimum of $1M and a maximum of the lesser of (1) $25M or (2) an amount, when added to the borrower’s existing debt, which does not exceed four times the borrower’s EBITDA.
Q. Does the Main Street Lending Program require borrower certifications?
A. Yes, in order to receive a qualifying loan, borrowers must attest that they require the funds because of the COVID-19 pandemic.
Q. Are there restrictions on the use of loan proceeds?
A. Yes, both the lender and borrower must attest—and the borrower must commit—that proceeds lent pursuant to the Main Street Lending Program will not be used to repay or refinance existing indebtedness of the borrower. Further, the borrower may not pre-pay any existing loan balances and may not pay any other debt of equal or junior priority other than mandatory principal payments of such debt until the loan under the Main Street Lending Program is paid in full. Also, the borrower cannot cancel or reduce any of its existing lines of credit, and must commit to make reasonable efforts to maintain its payroll and retain its employees until the loan is repaid.
Q. Are there any other commitments that a borrower must make in connection with receiving loans under the Main Street Lending Program?
A. Yes, the borrower must attest that it will follow compensation, stock repurchase, and capital distribution restrictions that apply to direct loan programs under section 4003(c)(3)(A)(ii) of the CARES Act, and lenders and borrowers will each be required to certify that the entity is eligible to participate in the Main Street Lending Program, including in light of the conflicts of interest prohibition in section 4019(b) of the CARES Act.
Again, the Main Street Lending Program is subject to open comment until April 16, 2020. M&R would be happy to submit comments on your behalf, or you can do so directly here.
We are working diligently to keep our clients up to date on coronavirus-related developments. Nevertheless, these developments are changing daily and, in some cases even hourly, so it is important that you make sure you are dealing with the most current information. That being said, this alert is not offered, and should not be relied on, as legal advice. You should consult an attorney for guidance and counsel regarding any specific concern or situation.