Shearman & Sterling partner Michael Chernick (New York-Finance) participated in a follow up webinar on Friday, May 1 at 1 pm ET with OakNorth’s CIO Sean Hunter and Director Neil Kahrim to discuss the Federal Reserve’s newly expanded Main Street Lending Program. Given the legal scrutiny of the delivery of the Paycheck Protection Program and its operational challenges, the panelists covered:

• Eligibility and Compliance: Lookback on these programs will require meticulous record keeping of process and client eligibility
• Banks’ duty to evaluate all clients: While banks retain discretion in underwriting, prioritization of clients may come under scrutiny
• Broader eligible borrowers: Lower minimum loan size of $500,000 and higher cap on eligible business size (15K employees and $5 billion of revenue)
• More favorable Terms: LIBOR based funding and EBITDA based on existing methodology 
• Introduction of the Priority Loan Facility: New facility for new loans from $500,000 to $25 million, subject to 6x leverage cap and 15% retention by banks

OakNorth is a U.K. bank for small and medium sized companies that provides business and property loans.

Listen to the replay on the Federal Reserve’s newly expanded Main Street Lending Program | Access Password: 9f+m!V&z