Apr. 13, 2020

UP NEXT: Main Street Lending Program

On Friday, April 10th, the Federal Reserve announced its Main Street Lending Program, a much-anticipated program which is expected to finance up to $600 billion. The Main Street Lending Program is open for comment until April 16, 2020, so we anticipate changes to the program in the interim and shortly thereafter. While we await final guidance, we wanted to provide to you a brief list of some of the details shared thus far: 

It appears this will be able to be obtained in addition to the Paycheck Protection Program (PPP) loans, assuming the borrower was also eligible for a PPP loan.

This can be a new loan, or an expansion of an existing loan (new tranche). Like the PPP and many of the other COVID-19 relief loans, they will likely be accessed through existing banking relationships.

Eligible Borrowers:

  • U.S.-based and organized businesses with up to 10,000 employees OR up to $2.5 billion in 2019 annual revenues.  As a result, businesses which did not qualify for one of the SBA loan programs might be able to avail themselves of this Program.
  • Significant operations and the majority of the business’s employees must be based in the United States.

Terms of the Loan:

  • The loans are for 4 years with amortization of principal and interest deferred for 1 year.  
  • Interest rates are expected to be between 2.5 and 4%, and adjustable.
  • The minimum loan size is $1 million. 
  • The maximum loan amount for a new loan is the lesser of $25 million or the amount that when added to the borrower’s existing and committed but undrawn debt does not exceed 4 times borrower’s 2019 earnings before interest, taxes, depreciation and amortization.  The maximum loan amount for an upsized tranche of an existing loan is the lesser of $150 million, 30% of the borrower’s existing outstanding and committed but undrawn bank debt, or an amount that when added to the borrower’s existing outstanding and committed but undrawn debt does not exceed 6 times the borrower’s EBITDA.
  • There is no prepayment penalty.
  • The borrower may be required to pay a 100 basis points facility fee and a 100 basis points origination/servicing fee.

Generally speaking, the borrower cannot use it to repay or refinance pre-existing loans, and must not cancel or reduce any existing or outstanding lines of credit. Additionally, the borrower cannot repay other debt of equal or lower priority, with the exception of mandatory principal payments, until this loan is repaid in full.

The borrower must certify in good faith that it requires financing due to the exigent circumstances presented by COVID-19, but distinct from the PPP, the certification relating to employee retention merely states that, using these funds, it will make “reasonable efforts” to maintain payroll and retain its employees during the term of the loan.

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.

As more information becomes available, we will be working with clients to help them incorporate this loan program, as well as others, into their finance plan at this time. Please contact Tripp Scott with any questions or for advice regarding this new program.



Unless we reverse course, the U.S. is on the road to destruction

Once upon a time, people unashamedly espoused the concept of “American exceptionalism.” We took pride in our founding and on the principles of true equality, the inalienable rights of life, liberty and the pursuit of happiness, and consent of the governed. 

Tripp Scott’s Charles Tatelbaum Elected to Shepard Broad Law School Board of Governors

Fort Lauderdale, Fla., May 9, 2023 Tripp Scott today announced that Charles Tatelbaum, a director with the firm, was elected for a two year term to be Vice-Chair of the Board of Governors of the Shepard Broad School of Law at Nova Southeastern University (NSU).

Florida Legislature Enacts Recent Changes to Statute of Limitations and Statute of Repose Affecting Construction Litigation

by Tripp Scott's William C. Davell and Stephanie C. Mazzola

On April 13, 2023, Florida’s Governor Ron DeSantis signed into law Florida SB 360, which, among, other things, shortens the statute-of-repose period for commencing an action based on the design, planning, or construction of improvements to real property.  See ch. 2023-22, Laws of Fla. (2023).  The new law went into effect immediately upon signing; however, the amendments to the statute of limitations and statute of repose set forth in section 95.11(3)(c), Florida Statutes (2023), apply only to actions commenced on or after the act’s effective date, regardless of when the cause of action accrued. See ch. 2023-22, § 3, Laws of Fla. (2023).  An exception is that any action that would not have been barred under section 95.11(3)(c) before the act was amended “must be commenced on or before July 1, 2024.” Id.

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