Passenger vessel operators' loan

The Federal Reserve recently announced the establishment of the Main Street Lending Program to support small and medium-sized businesses that were in good financial standing before the coronavirus pandemic. The new program is different from the Small Business Administration’s Paycheck Protection Program (PPP). PPP is intended to help businesses until June 30. A Main Street Lending Program loan can provide assistance for a longer period. The Passenger Vessel Association said it appears that most of its members will be eligible to apply under this program. The program offers four-year loans to companies that employ up to 10,000 workers or with revenues of less than $2.5B. Principal and interest payments will be deferred for one year. Main Street Lending Program should be operational in May. Unlike PPP, a loan through the MSLP will not be forgivable, but must eventually be paid. Also, a Main Street loan recipient does not have to commit to maintaining a specific level of payroll and employees, but must agree to make “reasonable efforts” to maintain payroll and retain workers. An applicant must attest that it requires financing due to the exigent circumstances presented by the Covid-19 pandemic. To encourage banks to make these loans, the federal government will assume liability for 95 percent of the amount in the event of a default. MSLP is designed to enable up to $600B in new financing for businesses. Fact sheets about the MSLP - Main Street Lending Program fact sheet (Source: Work Boat 04/16/20)