Gordon Brothers, the global advisory, restructuring, and investment firm, announced today the appointment of Steven Holstein as Head of Business Development.

As Head of Business Development, Holstein will be responsible for building, driving, and leading global business development, including research, sales, and marketing strategies.

- Debt covenant amended

- Raised $120 million in additional revolver capacity

- Total liquidity position of $3.8 billion

- Cost reduction program launched with target 2020 savings of $500 million

I hope you had a safe and peaceful weekend as many of us celebrated the Passover and Easter holidays and found some respite from the crisis in our friends, families and communities.  Events continue to unfold at a rapid pace, and I’d like to bring you up to speed on what our association is doing to analyze and share information and influence outcomes to support our collective interests.  Our priority remains to attend to the well-being of our SFNet community and to fulfill our mission of putting capital to work. 

On the legislative and regulatory front, we have focused our Advocacy resources on three imperatives.

• Leveraging the CARES Act. Last week an additional $250B was pledged to the already oversubscribed Paycheck Protection Program. SFNet and our volunteers, in alignment with the AFA, ELFA, ASEA and other trade associations, are petitioning legislators to simplify execution challenges, modify affiliation rules and extend eligibility to financial services companies under PPP. Our positions on these matters can be found at SFNet.com. 

On March 27, 2020, Congress approved the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”).  The CARES Act includes extensive provisions to address the current public health crisis, including, among other things, $349 billion of commitments for general business loans under Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) through June 30, 2020 under Title I of the CARES Act, titled “Keeping American Workers Paid and Employed Act,”  which sets out the terms for the “Paycheck Protection Program.”

The Paycheck Protection Program has been of particular interest to members of Secured Finance Network because it provides potential interim financing for small businesses that are typical borrowers from many member lenders.

Following up on the description in the articles above here are answers to some frequently asked questions from members of the Secured Finance Network.

Gordon Brothers, the global advisory, restructuring, and investment firm, announced today the appointment of Laurence Sax as Chief Operating Officer.

As COO, Sax will lead Gordon Brothers’ finance, accounting, treasury, financial planning, corporate development, and information technology functions.  He brings over 30 years of operating, finance, and turnaround and restructuring experience to the firm.

U.S. health officials say Americans should wear masks in public to combat the coronavirus. Financial support by CIT Group Inc. (NYSE: CIT) is helping two California apparel makers create masks that protect with style. Sanctuary Clothing and Karen Kane, both Los Angeles-based clients of CIT's Commercial Services business, have rolled out stylish face masks that can be worn by consumers to provide another layer of protection against COVID-19 transmission when out in public. Both clothing companies are using proceeds from sales of fashion masks to help finance donations of masks to hospitals and other healthcare facilities.

SFNet, in alignment with the International Factoring Association and Equipment Leasing and Finance Association has petitioned the Small Business Administration and Department of the Treasury to amend its Interim Final Rule prohibiting financial services companies from participating in the Paycheck Protection Program under the CARES Act.  In a letter to Secretary Mnuchin and Secretary Carranza, CEO Rich Gumbrecht vigorously reinforced SFNet’s prior calls for eligibility of “these non-depository lenders [who] extend economic lifelines to small businesses and are themselves now under financial stress.”  SFNet has engaged outside resources and is continuing to work with organizations with aligned interests in conjunction with this and other matters related to the CARES Act and other relief efforts.  We encourage everyone in our community to reach out to your representatives in Congress to support this imperative.  For more information on how to do so, contact Michele Ocejo at mocejo@sfnet.com.  Please click here to view the letter.

Ryan Jaskiewicz is CEO of 12five Capital, LLC. He started 12five Capital in early 2006 at the age of 23. Jaskiewicz attended University of Illinois at Chicago where he received a bachelor of arts in political science.

More than a week after Congress approved the largest fiscal stimulus in U.S. history, many companies still don't know if it will provide the financial lifeline they need to stay afloat.

Since the legislation passed on March 27, industry groups have been pressing policymakers to ensure a large chunk of their firms can actually benefit from a major lending program at the heart of the new law. Under the CARES Act, the Treasury is getting $454 billion in funds to provide credit protection for the Fed's emergency lending operations, a backstop expected to lead to about $4.5 trillion in Fed lending.

California Bank of Commerce (CBC) announces the launch of its Sponsor Finance Lending Division, led by well-known dealmaker Larry LaCroix. The division works closely with private equity firms (including Search Funds) and direct lenders to provide cash flow-based senior debt financing.

As of March 31, 2020,  the US Treasury Department has issued the application form and other guidance in connection with the Paycheck Protection Program which can be found on its website:  https://home.treasury.gov/cares

The materials on the website include:

●  Paycheck Protection Program Overview
●  Paycheck Protection Program (PPP) Information Sheet: Lenders
●  Paycheck Protection Program (PPP) Information Sheet: Borrowers
●  Paycheck Protection Loan Program application
●  Paycheck Protection Program – Interim Final Rule

SFNet’s CEO submitted a  letter to US Treasury Secretary Mnuchin and Administrator Carranza of the Small Business Administration, seeking affirmation of eligibility of non-bank lenders under the CARES Act. The letter seeks to further ensure that non-bank lenders are afforded all available protections under the Act as regulations are now established and implemented.  

(Editor’s note: Subsequent to this letter, the SBA has issued its ‘Interim Final Rule’ that makes businesses identified in 13 CFR 120.110, which includes financial services companies, ineligible for the Paycheck Protection Program.   SFNet will be seeking any recourse available to press the SBA to amend this position)

A corporate scramble for cash and massive injections of liquidity by the Federal Reserve are reverberating across the balance sheets of U.S. commercial banks, with commercial and industrial loans registering the biggest week-over-week increase in more than 45 years.

C&I loans jumped 7.4%, or $176.17 billion, during the week ended March 18, according to seasonally adjusted data in the Fed's latest H.8 report on bank assets and liabilities. The data covers a week during which the crisis caused by the new coronavirus pandemic escalated rapidly. The Trump administration declared a national emergency March 13, and states placed increasing restrictions on public gatherings and business activity aimed at slowing the spread of the virus.

Editor's Note: SFNet’s Advocacy Committee is prioritizing initiatives to support our bank, non-bank and service provider constituents.  A key component of this is analyzing the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was enacted on March 27, for specific opportunities to address the needs of our members and borrowers across asset classes and industries, as the focus now turns to implementation.

Forrest Gump said, “Life is like a box of chocolates; you never know what you are going to get.” Partnering with other lenders can be similar. You don’t know what you are going to get if you jump into partnerships without doing your due diligence and establishing alliances with the best partners.

On Sunday night, March 22, 2020, the federal banking agencies (OCC, FDIC, NCUA, Federal Reserve), the Consumer Financial Protection Bureau and the State Conference of Bank Supervisors issued an Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus.

Aaron Hughes looks at some of the ways directors might misuse their invoice finance facilities and how lenders can stem any potential losses.