COVID-19 has rendered companies of all sizes in need of liquidity. However, the federal relief programs previously enacted have focused on small businesses or large companies, with mid-size companies often excluded from federal relief. To help narrow this gap, the Federal Reserve, with the approval of the Treasury Secretary, announced on April 9, 2020, via a press release, the details of the Main Street Lending Program (the Program). The Program will utilize $75 billion of capital made available from the U.S. Department of the Treasury (the Treasury), using funds appropriated for the Exchange Stabilization Fund under section 4027 of the Coronavirus Aid, Relief and Economic Security Act (the CARES Act). When leveraged by the Federal Reserve, this capital provides up to $600 billion in liquidity to participating lenders. Furthermore, the press release recognizes that the Program is still being finalized and that the design is open to comment through the Federal Reserve website until April 16, 2020. The Federal Reserve has not yet announced when the Program will be operational. Set forth below is an overview of the Program. Robinson+Cole will continue to monitor regulations and guidance from the Treasury and the Federal Reserve on this topic as both become available.
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