Member Article

On April 9, 2020, the Board of Governors of the Federal Reserve System (the “Board”) announced the establishment of the Main Street Business Lending Program (“Main Street Loan Program”), an up to $600 billion lending program for mid-size businesses. The Department of the Treasury, using funding from the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, will provide $75 billion in equity to a single common special purpose vehicle (“SPV”) in support of the Main Street Loan Program.

Below is a high-level summary of the provisions relating to the Main Street Loan Program, under which eligible lenders may either (i) originate new loans through the Main Street New Loan Facility (“New Loan Facility”) or (ii) use the program to increase the size of existing loans to businesses through the Main Street Expanded Loan Facility (“Expanded Loan Facility” and, together with the New Loan Facility, the “Facilities”). Borrowers may participate in only one of the Facilities.

This summary is based on terms sheets released by the Federal Reserve on April 9. 2020. The Board and Secretary of the Treasury may make adjustments to the terms and conditions described in such term sheets, and further updates are expected with the release of formal regulations and guidance. Such guidance and regulations will provide further detail on the administration of the Main Street Loan Program and may materially change the summary below.

There is currently no process in place to apply for a loan under the Main Street Loan Program, and its implementation awaits the formation and funding of the SPV and various other actions. Companies are encouraged to seek advice from qualified legal counsel before making business decisions based upon the anticipated commencement of this program.

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Additional Questions? Contact a member of the Haynes and Boone Finance or Corporate Practice Groups at Haynes and Boone, including the following individuals:

Haynes and Boone

Paul Amiel (Partner, Finance): [email protected]

Jim Markus (Partner, Finance): [email protected]

Alex Grishman (Partner, Finance): [email protected]

Brent Beckert (Associate, Corporate Law): [email protected]

Rachael Apfel (Associate, Corporate Law): [email protected]

Haynes and Boone, LLP provides this information as a service to clients and the community for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship. Readers should not act upon this information without seeking advice from professional advisers.