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DON'T QUALIFY FOR PPP?

I AM NOT ELIGIBLE FOR THE PPP, WHAT OTHER LENDING PROGRAMS ARE ELIGIBLE? Under the Federal Reserve Act and U.S. Treasury and Federal Reserve Board, the Main Street Lending Program consists of the Main Street New Loan Facility (MSNLF) and the Main Street Expanded Loan Facility (MSELF). The two loan programs will afford up to $600 billion for businesses. A borrower may only participate in one of the loans under the Main Street Lending Program. The Main Street New Loan Facility is intended to facilitate lending to small and medium-sized businesses that are not eligible for the SBA Paycheck Protection Program. The maturity of the loan is four years and capped at $25 million. A Federal Reserve Bank will purchase 95% participation in eligible loans from eligible lenders, who will retain 5% of each eligible loan. Principal and interest payments will be deferred for one year. The Main Street Lending Program loans are not eligible for loan forgiveness. Who is eligible? Up to 10,000 employees Up to $2.5 billion in 2019 annual revenues U.S.-based businesses Who is an eligible lender? U.S. insured depository institutions U.S. bank holding companies U.S. savings and loan holding companies What’s the difference between the Main Street Expanded Loan Facility and the Main Street New Loan Facility? Both loans must meet the following: Four-year maturity Amortization of principal and interest deferred for one year Adjustable interest rate of Secured Overnight Financing Rate + 205-400 basis points Minimum loan size of $1 million No early prepayment penalty The Expanded Loan Facility is an existing term loan, both secured and unsecured, that originated before April 8, 2020 and has a maximum loan size that meets one of the following criteria: Equal to the lesser of one of $150 million


30% of the borrower’s existing outstanding and committed, but undrawn bank debt

An amount that, when added to the borrower’s existing outstanding and committed but undrawn debt, does not exceed six times the 2019 EBITDA

The New Loan Facility is a new unsecured term loan that was originated on or after April 8, 2020 and has a maximum loan size that meets one of the following criteria:

$25 million

An amount that, when added to the borrower’s existing outstanding and committed but undrawn debt, does not exceed four times the 2019 EBITDA

What certifications are there?

From the origin date of the loan through 12 months following, the borrower must:

Not repurchase an equity security listed on the national securities exchange of the business or its parent, except to the extent required under a contractual obligation in place prior to March 27, 2020

Not pay dividends or make other capital distributions with respect to common stock

Not increase the total compensation of officers and employees who had a total compensation of over

$425,000 in 2019. For officers and employees that had a total compensation of over $3 million in 2019, their total compensation is capped at the sum of (i) $3 million and (b) 50% of the excess over $3 million of the total compensation received by the officer or employee in 2019. Total compensation includes salary, bonuses, awards of stock, and other financial benefits.

For more on the loan features, visit the F ederal Reserve.

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