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.

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