Dear SFNet Community:

I trust you are safe and well as we begin to enter a new phase of this crisis, that of slowly reopening our economy. While the devastation we have experienced has been profound on both a personal and professional level, our community has played a crucial role in weathering this storm and will continue to do so as we emerge stronger and more resilient than before. I am moved by examples of how our members are keeping essential supply chains intact, funding providers of critical services and responding to the surge of funding requests from businesses that have pivoted away from their usual products to manufacture PPE to ease the shortage, not to mention those who are donating and raising funds for groups being adversely affected during this unprecedented time.

SFNet’s vision of being an essential community for those who provide such solutions has never felt more relevant or rewarding. On the relief effort front, our Advocacy Committee has been communicating with legislators and meeting directly with Treasury and Fed officials to amend and refine the Main Street Lending Programs. While we expect the roll out may still be weeks away, we have had initial success in reducing lender risks and changing the base index from SOFR to LIBOR. We have opened prospects for including non-banks as eligible lenders, reducing loan thresholds, relaxing borrower eligibility criteria and incorporating more balanced priority interests that do not dilute existing creditors. We will hold an informative webinar on these outcomes as soon as they become more clear.

We continue to push for lender eligibility as borrowers under the Paycheck Protection Program in this and subsequent rounds. There have been court cases brought further bolstering our case. We’ve been able to help modify the rules to make non-banks eligible as lenders, who are also now able to pledge PPP loan notes to the Federal Reserve in exchange for low interest, non-recourse loans under the PPPLF.

House Democrats released the HEROES Act last week as a marker for the next round of negotiations for COVID-related relief. It would relax some PPP eligibility criteria, extend the covered period from June 30 to December 31 and repeal the requirement that 75 percent of loans be spent on payroll. There will be additional opportunities to press our interests with our champions on Capitol Hill in the coming weeks and months.

And for our international lending community, we have engaged the UK government to bolster secured lender rights in a moratorium that would delay forbearance on distressed loans.

Since mid-March, nearly 5,000 participants have attended SFNet’s fees-waived-for-members “Crucial Conversation Webinars”. These programs have focused on critical topics of relevance to our constituent groups from large banks to small factors, service providers and everyone in between. The value of these programs as measured by net promoter and utility scores has been extraordinary. Many, like last week’s presentation in conjunction with SFNet’s latest Market Pulse Report release, help us understand how to navigate our current challenges while preparing for opportunities that lie ahead.  We are grateful to our panelists and sponsors for supporting this essential programming.

Looking forward, we recognize our world will be changed by these circumstances and SFNet will be adapting as well. We are investing in new virtual technologies, tools and resources that will keep us connected by building relationships and sharing ideas that are essential to our success. Much more on this to come. In the meantime, thanks for everything you are doing every day to help heal our economy and fulfill our mission of putting capital to work.

Warmest regards,

Rich