Simple

Set up search packages on these loans quickly and easily, for standardized lien and business searches across Main Street Program loans. File liens easily, as well as conduct a search-to-reflect to verify the lien’s position on the public record.

Complete

Access dashboards and reports that show the search and filing work you did on your Main Street Program loans. This helps you to satisfy future auditor and bank examiner requests for information on these loans.

Protected

Verify that a lender’s existing liens for debtors who take a Main Street Program loan are perfected, with the correct name of the debtor, and filed in the right jurisdiction, with the option of alerts to keep you apprised of any subsequent modifications to the loan or debtor status.

FAQs
  • What are some issues I should consider when managing search and liens for Main Street Program loans?
    Main Street Program loans must be senior to or pari passu (equal footing) to all other loans with the borrower. Therefore, before issuing a loan under the Main Street Program, it is important to have visibility of all outstanding liens against the borrower in order to fully measure their creditworthiness.
  • Do I need to do anything differently with my ongoing search and lien process due to debtors participating in EIDLL, Main Street Program, or PPP?
    There has been an exponential increase in debt taken by businesses and individuals through these government programs. To help ensure that your borrower is not over leveraged or breaking any of their loan covenants with you, we recommend you do frequent lien searches — both UCC and tax liens.
  • Is the Federal Reserve requiring any specific due diligence?
    Lenders are expected to do their normal due diligence, which may include comprehensive searches including UCC, federal and state tax liens, litigation, and bankruptcy searches. Further, when selling their loans to the Federal Reserve, the banks must report amongst many things the lien position for each secured loan.
  • Who is responsible for tracking the filings to ensure they remain effective?
    Lenders will be the secured party on the liens and are required by the Federal Reserve to ensure that they exercise the same duty of care as would be performed if the lender retained a beneficial interest in the entire loan. So, it would be expected that the lender would track lien perfection on Main Street Program loans as they would for similar loans.
  • Is the Federal Reserve requiring any particular documentation of the searches or filings?
    Because this is a program facilitated by the U.S. Government, many of our customers anticipate future audits or inquiries to prove that they followed standard underwriting and due diligence practices for Main Street Program loans. Also, it will be prudent in case of any conflicts or trigger event that the lender have full traceability on its actions. They are therefore preparing to fully document their adherence to standard due diligence practices.
  • How should I think about the risk of these loans versus others in our portfolio?
    Lenders are held to the same standards in managing risk on Main Street Program loans as they would for their regular loans. They should ensure the liens remain perfected through the life of the Main Street Program loan, and the Federal Reserve expects lenders to also follow market-standard workout processes in event of default or bankruptcy as they would for their regular loans. Hence, normal lien management practices should continue to be followed regardless of the size of the stake held by the lender.

Contact us