Coronavirus Impacts to Lending

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Coronavirus Lending Impacts

What loan options are available in today's environment? Learn about PPP & Main Street Lending Program.

Loan Options amid COVID-19

The impacts of COVID-19 are potentially catastrophic for many businesses that extinguish their liquidity or violate the terms of their existing lending agreements. Further, these disruptions are likely to persist for some time. As the economic damage related to the coronavirus pandemic continues to unfold, many small and medium size businesses are considering new financing options to weather the economic storm. By taking advantage of loan options as soon as possible, companies will be able to restructure their balance sheets in a manner that can benefit the business well after the crisis has abated.

Which Loan Program is Right for My Organization?

On Friday March 27, 2020 the President signed into law The Coronavirus Aid, Relief, and Economic Security (CARES) Act. Provisions under the legislation allocated stimulus funding for two key programs to assist small and medium sized businesses access debt capital: Main Street Lending Program & Paycheck Protection Program.

While CEOs and CFOs are dealing with organizational changes due to the pandemic, it can often be hard to determine which loan programs are viable for the company. Even worse, they lack the time it takes to properly qualify lenders, compare loan terms and negotiate loan agreements. Below offers a quick guide to evaluate the loan options available through the recently passed CARES Act. Even better, Cerebro can help companies prepare their PPP loan applications and evaluate other loan options to help middle market companies recapitalize.

Main Street Lending Program

Up to $600 billion to help medium-sized business maintain keep workers employed amid the pandemic and economic downturn. This program provides regulated banks a funding facility to extend unsecured loans that are not federally guaranteed, but instead are sold to the Federal Reserve via a 95% participation.

Paycheck Protection Program

Up to $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn. This program provides 100% federally guaranteed loans to small businesses who maintain their payroll during this emergency. These loans may qualify for forgiveness if borrowers meet predefined conditions.

Curious how much debt your company can receive in today’s environment?

NOTE: None of the information contained herein is intended to be legal, tax, or investment advice, nor should it be relied on as such. You should consult your own legal, tax investment or other advisors, at both the onset of any transaction and on an ongoing basis to determine the laws and analyses applicable to your specific circumstance. Cerebro Capital, Inc. hereby disclaims all warranties associated with this information. The information contained in this communication may be obtained from a variety of sources and may be subject to change and Cerebro does not accept responsibility for, or guarantee it to be, accurate, timely, secure, error-free, malware-free or virus-free. Cerebro disclaims any and all liability for the information and disclaims all express or implied warranties, including without limitation, any warranties for information or errors contained in, or omissions from, the information, and the implied warranties of merchantability and fitness for a particular purpose. Cerebro and its employees and officers shall not be liable for any loss or liability suffered by you resulting from the provision to you of such information or your use or reliance in any way on such information. Such information is being provided on an “AS-IS, WHERE-IS” basis and “WITH ALL FAULTS.”

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