Federal Reserve set to make up to $600 billion available to eligible small and mid-sized businesses.

On April 9, 2020, the Board of Governors of the Federal Reserve System (Federal Reserve) announced details regarding the terms and conditions of two Main Street lending facilities to support small and mid-sized businesses that were “in good financial standing” prior to the COVID-19 emergency: the Main Street New Loan Facility (MSNLF) and the Main Street Expanded Loan Facility (MSELF, and together with the MSNLF, the Main Street Lending Facilities). The Federal Reserve will establish a single common special purpose vehicle (the Main Street Facility SPV) which will purchase 95% participations in eligible loans from eligible lenders. The combined size of the Main Street Lending Facilities will be up to $600 billion, which will consist of a $75 billion equity investment in the Main Street Facility SPV from the Department of the Treasury (using a portion of the $454 billion appropriated in Title IV of the CARES Act to support programs or facilities established by the Federal Reserve, see Latham’s related Client Alert) and up to $525 billion to be lent to the Main Street Facility SPV by the Federal Reserve.