On May 12, 2020, the Federal Reserve Bank of New York announced the issuance of updated Terms and Conditions and a Frequently Asked Questions document (the “FAQs”) regarding the 2020 Term Asset-Backed Securities Loan Facility (“TALF 2020”). In this Legal Update, we discuss several aspects of the updated TALF 2020 documents with particular relevance to

On April 30, 2020, the Federal Reserve Board announced expanded loan offerings and terms for the forthcoming Main Street Lending Program. Among other changes, Main Street is now open to larger businesses with up to 15,000 employees or $5 billion in 2019 annual revenue (previously up to 10,000 employees or $2.5 billion in 2019 annual

On April 9, 2020, the U.S. Federal Reserve announced revised preliminary terms for the Term Asset-Backed Securities Loan Facility (“TALF 2020”). Certain CLO securities that are rated AAA by at least two rating agencies and are not rated below AAA by any other rating agency will be eligible collateral for loans under this program. In

The SBA’s Paycheck Protection Program, a $349 billion loan guaranty program established by the CARES Act to provide deferrable, forgivable loans up to $10 million to small business owners addressed in more detail in prior Mayer Brown posts regarding the statutory provisions and the SBA’s Interim Final Rule, launched April 3, 2020. In the initial days after the program launch, hundreds of thousands of applications were submitted, but borrowers and lenders alike continued to have questions about key aspects of the program.

On April 6, 2020, the SBA clarified certain issues in new
Continue Reading SBA Issues New Official FAQs for the Paycheck Protection Program (PPP) Addressing Borrower Eligibility, Affiliation, Underwriting, and Updates to Previously Submitted Applications

As discussed in a previous post, Section 4003 of the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, authorizes $500 billion of liquidity to support businesses, states and municipalities “related to losses incurred as a result of coronavirus.”  It can be expected that a portion of the liquidity authorized by Section 4003

The Small Business Administration (SBA) released an interim final rule the evening of April 2 outlining key provisions of the SBA’s Paycheck Protection Program (PPP) and the provisions of the CARES Act relating to loan forgiveness. The rule is effective immediately.

Some highlights of the rule include:

Increase in interest rate. The interest rate on any PPP loan will be
Continue Reading SBA Releases Guidance on PPP Small Business Loans

In a development with potential relevance for leveraged borrowers and, by extension, the CLO market, the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, was signed into law by President Trump on March 27, 2020. The CARES Act provides for liquidity support for both large and mid-size businesses that, unlike the Primary

On March 31, 2020, the U.S. Department of the Treasury issued guidance on the Payroll Protection Program (PPP) under the CARES Act.  The PPP provides small business with funds to pay payroll costs, including employee benefits.  The funds can also be used to pay interest on mortgages, rent and utilities.  The specific guidance issued included

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. Among other things, the CARES Act creates the “Paycheck Protection Program” (PPP), which provides up to $349 billion to expand the Small Business Administration’s (SBA’s) existing 7(a) loan program to support new loan guarantees and subsidies. The terms of the PPP are described in more detail here.

The CARES Act allows the SBA and the Secretary of the Treasury to authorize additional lenders to make paycheck protection loans if they determine such additional lenders have the necessary qualifications to process, close, disburse and service loans made with the guaranty of the SBA. Details regarding the application process are expected to be provided in the next week. Treasury Secretary Steven Mnuchin publicly stated in an interview with Fox News yesterday that he “expects to have a program up on Friday.”


Continue Reading Potential for Fintech Lenders and other “Additional Lenders” to enter the SBA Market: What Lenders Need to Know