TSL Feature Articles

Money-laundering statutes, restrictive banking regulations and the stigma surrounding the cannabis industry have caused established banks and well-known independent secured lenders to stay clear, but the possibility of new regulations may ease their fears.

Ares Commercial Finance (“ACF”) announced that Mitch Drucker has joined as a Partner. Mr. Drucker will be a part of the ACF leadership team comprised of Mitch Goldstein, Ryan Cascade, John Nooney and Oleh Szczupak.  He will also sit on the Investment Committee for ACF and be involved in all aspects of the business from origination to portfolio management.

During the Secured Finance Network’s webinar on the healthcare finance sector, streamed May 15, Allen Wilen of EisnerAmper, described a future scenario affected by human longevity, geographic location and how COVID-19 affected you. New trends relevant to finance executives are accelerating out of necessity because of the sudden impact of the coronavirus pandemic and the weaknesses it illuminated.

The Post-COVID New Normal For Store Closing and Strategic Sale Events. Reflections by SB360’s Scott Bernstein.

“Why aren’t you in the water?  Nobody’s going in.  Please… get in the water.”  Those pleading words uttered in the 1975 blockbuster movie “Jaws” were part of an ill-fated effort by Mayor Larry Vaughn to save his fictional sleepy beach town from financial ruin.  Those of us who saw the movie or have binged watched Shark Week re-runs know how that worked out for the reluctant residents of Amity.

White Oak Commercial Finance is pleased to announce that Martin F. Efron has joined the firm as the portfolio manager in New York, serving the Northeast region. He will report to Bob Grbic, CEO and president of White Oak Commercial Finance.

As we make it to week seven of the coronavirus pandemic, it is hard not to reflect on this incredible period in history. The pandemic and the associated COVID-19 virus are an enigma that is bringing the world economy seemingly to its knees. First the virus was dismissed by the Western world as a mere flu-like illness originating in Asia, then an epidemic that might disrupt the Chinese economy, then an Italian problem, a cruise ship issue, a Washington state complication, and a New York dilemma. Now, it has finally been recognized for the major world concern that it is. The coronavirus has erupted into a global pandemic with over three million cases that will likely have a global and possibly U.S. pandemic-related death toll second only to the Spanish flu of 1918. We already know that this pandemic will have the greatest impact on the global economy since perhaps the bubonic plague of 1342, also known as the Black Death.

On April 30, 2020, the Federal Reserve updated its Main Street Loan Program (“MSLP”) terms based on thousands of comments (including comments from Secured Finance Network) submitted since the program was initially announced on April 9, 2020.  Several important updates were made to the MSLP, though many changes of interest to asset-based lenders were contemplated but not fully developed in this new guidance.[1]  In particular, asset-based lenders will likely need to consider the impact of MSLP terms described below on existing financing structures, such as the pari passu treatment of collateral, which could dilute existing lender security in some cases, the continued reliance on EBITDA and risk ratings as metrics for determining borrower eligibility and the restrictions on assignments by MSLP lenders.

We all want to return to normal, or the new normal, as quickly as possible.  The question businesses and their stakeholders need to ask themselves is what does normal mean and how can the return be funded.

For most companies, their working capital has been depleted during the shutdown as they struggled to pay employees and keep vendors satisfied, while dealing with impacts to sales and accounts receivable.

On April 30, 2020, the Federal Reserve announced that it is expanding eligibility to participate in the Federal Reserve’s Paycheck Protection Program Liquidity Facility (the “PPPLF”) to all lenders eligible to originate Paycheck Protection Program loans.[1]  The PPPLF permits eligible PPP lenders to pledge PPP loan notes to the Federal Reserve in exchange for a low interest, non-recourse loan from the Federal Reserve in the amount of the pledged PPP loan note. 

Program Update

When originally announced, the PPPLF was only available to PPP lenders that are depository institutions.  Now, all PPP lenders approved by the SBA, including banks, credit unions, Community Development Financial Institutions, members of the Farm Credit System, small business lending companies licensed by the SBA, and some financial technology firms, are eligible to participate in the PPPLF.