Dear Valley Members & Customers:
Valley has received the following information from the NAFD and NAW organizations. Please read and take advantage of the knowledge shared and webinar opportunities for this coming week:
Federal Reserve Announces Launch of the “Main Street Lending Program”
As you know, we have been working with our trade association allies to urge the Treasury Department and the Federal Reserve to move forward ASAP with guidance on the loan programs to help companies with more than 500 employees.
This morning the Fed finally announced its lending program for companies with 500-10,000 employees, with less than $2.5 billion in revenue. Their press release includes links to numerous documents outlining the terms of loans under this program. We are all still analyzing this loan program and trying to understand how it would work, but we wanted to get this information into your hands as quickly as possible.
Among the key provisions in the program: “Eligible banks may originate new Main Street loans or use Main Street loans to increase the size of existing loans to businesses.” The maximum “new” loan is $25 million, the maximum “expanded” loan is $150 million.
Also of note: many of the conditions spelled out in the CARES Act will be required of borrowers under the Main Street Lending program, but there is no mention in the Fed material of requiring borrowers to remain neutral in union organizing campaigns: “The Eligible 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.”
Click here to read the Fed press release.
The loan term documents for “new” and” expanded” loans can be read here:
Term Sheet: Main Street New Loan Facility (PDF) and Term Sheet: Main Street Expanded Loan Facility (PDF)
We will of course continue to analyze this program and to seek answers from the Federal agencies to the questions that will inevitably arise in that process and will keep you apprised of what we learn.
Update on Paycheck Protection Program (PPP):
There are a couple of new resource documents on PPP that you might find useful, including an updated FAQ document from the Treasury Department. Links to both are below.
Finally, we have had several questions about the loan forgiveness provisions of PPP loans, especially in terms of retaining payroll headcount. Unfortunately, there are no conclusive answers on these matters yet. We are advised that the SBA will be releasing guidance soon.
Click the link below for an excellent update on the PPP:
Senate Democrats Block Additional Paycheck Protection Program Funding
This morning, Senate Majority Leader Mitch McConnell asked for unanimous consent to pass a bill approving an additional $250 billion in new aid for the Paycheck Protection Program, which gives forgivable loads to small businesses. Both Maryland Democratic Senators Ben Cardin and Chris Van Hollen objected to the increased funding for small businesses during this COVID-19 crisis. The Senate adjourned this morning with no deal to deliver critical new funding for struggling small businesses.
Banks and the Small Business Administration have been overwhelmed by the number of applications since the program began operating last Friday and there are serious concerns regarding the funding quickly running out. We have been in constant discussions with both the Administration and our allies on Capitol Hill urging them to provide clear guidance for our employers on the rollout of this program – as well as the “Main Street Lending Program” for larger businesses – as soon as possible.
Leader McConnell said on Wednesday evening, “I hope none of my colleagues object to my request for these urgently-needed funds. There is no reason why this bipartisan job-saving program should be held hostage for other priorities. Let’s re-fund the only program that’s already running dry and keep moving forward together.” Ten million Americans were laid off in just the last two weeks. If Senators delay this urgent paycheck support to insist on a broader bill, more Americans will lose their jobs unnecessarily.
Despite this, Senate Democrats blocked this urgent bill and offered their own plan seeking an additional $250 billion in funding for hospitals and local governments as well as increased food aid. The provisions that Democrats are seeking are already included in the CARES Act but the programs are still getting set up and the funding has yet to be allocated.
Even if Leader McConnell had succeeded today, Speaker Nancy Pelosi said Leader McConnell’s bill wouldn’t move in the House on Friday anyway. House Democrats also want a significant tranche of the new small business aid earmarked for underbanked businesses.
Additional Webinars on Workplace Issues
As the Coronavirus Pandemic continues to impact the United States economy and businesses across the nation, it can be hard to decipher how new regulations and laws may impact your business. To help you manage these issues NAW has compiled a few webinars that you may find useful.