Federal Reserve Launches Lending Facilities to Support Businesses in Response to COVID-19 Pandemic
After the recent adoption of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), the Board of Governors of the Federal Reserve (the “Federal Reserve”), the Department of the Treasury (the “Treasury”) and the Small Business Administration (the “SBA”) have established a number of programs intended to provide credit to small- and medium-sized businesses in response to the Coronavirus Disease 2019 pandemic (“COVID-19”). On April 9, 2020, the Federal Reserve announced the establishment of two new facilities, the Main Street New Loan Facility and the Main Street Expanded Loan Facility. It also provided guidance about two previously announced facilities that may be of greatest use to larger companies, the Primary Market Corporate Credit Facility and the Secondary Market Corporate Credit Facility.
Our Note summarizes the key aspects of the Main Street and Corporate Credit Facilities, and briefly discusses certain other programs implemented by the Federal Reserve and the SBA. We have also attached a chart comparing those four facilities’ most important features.