ACG in the NEWS

Federal Relief Too Little Too Late

Politics and red tape are keeping bailout funds from reaching the companies that need it most. 

Private Debt Investor, Robin Blumenthal, (September 10, 2020) subscription 

Middle Market Companies and the Pandemic

CT Expert Insights | Greg Corombus (September 9, 2020) | Association of Corporate Growth President and CEO Tom Bohn joins us to explain how middle market companies are surviving and thriving in the pandemic. He also discusses some of the frustrations middle market businesses have faced in trying to find a government program where they can qualify for loans. Listen to "Middle Market Companies and the Pandemic" on Spreaker.

ACG Credited in Latest CARES Act Oversight Panel Report

Middle Market Growth Magazine | Benjamin Glick (AUGUST 26, 2020) | The panel charged with overseeing the CARES Act released its latest report Friday, which included information provided by the Association for Corporate Growth. In its fourth monthly report to Congress on the CARES Act, the Congressional Oversight Commission included ACG’s suggestions in its recommendations, information that was provided by the organization’s president and CEO, Tom Bohn, during his testimony before the panel earlier this month.

“We were encouraged by what we read in the report, especially the commission’s receptivity to making substantial changes to the Main Street Lending program,” Bohn said. “Their recommendations reflected that.”

Commissioners said some businesses could benefit from better outreach from the Federal Reserve and Treasury about the Main Street Lending Program, citing an ACG survey that found 22% of respondents were unaware of it.

Read more about Bohn’s testimony here. The commission’s full report is available here.

Lawmakers push Fed to make lending program more inclusive for mid-sized borrowers

Yahoo! finance, David Brooke for Reuters, NEW YORK, Aug 12 (LPC) - US lawmakers are pushing the US Federal Reserve (Fed) to relax guidelines on its Main Street lending program to make it more inclusive for small and mid-size borrowers and their lenders.

The program came under fire during Friday's Congressional Oversight Commission hearing, where lawmakers expressed concerns mid-sized companies in need of financial assistance could not easily access federal funds. So far, just US$189m of loans across 29 transactions have either been committed or settled since the program’s introduction.

Chamber: Trump’s executive orders won’t cut it

Politico Influence, Theodoric Meyer, (August 10, 2020) | IF YOU MISSED IT ON FRIDAY: “Midsize companies that need to use the Federal Reserve’s so-called Main Street Lending Program to weather the coronavirus crisis are having trouble getting banks interested, business representatives warned a panel overseeing the Fed’s efforts,” POLITICO’s Victoria Guida reports. “The Association for Corporate Growth, a lobbying group for middle-market businesses, surveyed its members and found that 81 percent of them that tried to get a loan through the program weren’t able to” do so.

Congressional panel slams Fed’s Main Street Lending Program

Roll Call, Jim Saksa, (August 7, 2020) | The Main Street Lending Program, a $600 billion loan facility set up by the Federal Reserve with $75 billion from the Treasury Department, is supposed to be a life preserver for midsize companies too big for the Paycheck Protection Program and too small to issue debt in the Fed-backed securities markets.

But at the first Congressional Oversight Commission hearing Friday, expert after expert said the lending lifeline is falling far short for companies and workers drowning in a coronavirus-ravaged economy.

“I’m here this morning to provide testimony from the perspective of middle-market borrowers to help answer the question that you all are asking: who the Main Street Lending Program is helping,” said Tom Bohn, CEO of the Association for Corporate Growth, which represents 200,000 midsize companies. “Regrettably, I have no answer to offer you. We can neither borrow from the program nor find someone in our membership who has received a loan through it.”

Oversight panel questions value of Fed loan program for midsize firms

American Banker, Neil Haggerty, (August 07, 2020) | WASHINGTON — Members of a commission appointed to oversee the Federal Reserve’s response to the coronavirus pandemic expressed frustration with the pace at which the central bank’s Main Street Lending Program was propped up and the limited interest so far in the effort.

The Congressional Oversight Commission, created by the Coronavirus Aid, Relief, and Economic Security Act to oversee implementation by the Fed and Treasury Department, held its first hearing despite not yet having a chairperson.

The commission’s members — Reps. French Hill, R-Ark., and Donna Shalala, D-Fla., Sen. Pat Toomey, R-Pa., and Bharat Ramamurti, a former adviser to Sen. Elizabeth Warren, D-Mass. — questioned witnesses about limited participation in the Main Street program and how to prevent widespread closure of businesses. A Fed report released Thursday showed just eight businesses had taken out loans as of late July that were purchased by the MSLP.

Tom Bohn, CEO of the Association for Corporate Growth, echoed Hill’s concerns that restrictions in the Main Street Lending Program have limited midsized businesses’ access.

“These businesses were originally excluded from the PPP and there was hope initially that in the Main Street Lending provision that there would be opportunities for them to utilize benefits and lending from Main Street in order to not only keep jobs, but also invest in some of the changes that they need to do as people start to pivot, based on the economy,” Bohn said. “We have heard from them loud and clear that their inability to access them has had a significant impact on their businesses.”

Businesses blast key Fed program, saying banks not interested in lending

Politico, VICTORIA GUIDA, (August 7, 2020) | Midsize companies that need to use the Federal Reserve’s so-called Main Street Lending Program to weather the coronavirus crisis are having trouble getting banks interested, business representatives warned a panel overseeing the Fed’s efforts.

The Association for Corporate Growth, a lobbying group for middle-market businesses, surveyed its members and found that 81 percent of them that tried to get a loan through the program weren’t able to.

“To answer the question of who the Main Street Lending Program is helping? I have no answer to offer you,” said Tom Bohn, the group’s CEO, at a hearing Friday of the congressional commission overseeing the use of $500 billion in emergency funds by the Fed and Treasury Department. 

“Regrettably, I could neither borrow from the program nor find someone who has received a loan through it,” he added.

Months into recession, Fed’s Main Street loan program is at a crossroads

Washington Post, Rachel Siegel, (August 7, 2020) |  For months, the Federal Reserve’s $600 billion Main Street lending program has been overshadowed by a lengthy rollout and little appetite from banks and businesses alike.

Now, the Fed is increasingly facing questions over whether relaxing the program’s rules might help facilitate more business loans, or whether it should try an entirely different approach to help mid-sized firms fighting for survival.

ACG’s CEO Provides Testimony to CARES Act Oversight Panel

Middle Market Growth, Benjamin Glick, (August 7, 2020) | The Association for Corporate Growth’s CEO, Tom Bohn, spoke before a congressional commission on Friday about the lack of access to a federal program designed to provide financial support to middle-market companies hurt by the COVID-19 pandemic.

Bohn testified before the Congressional Oversight Commission, a five-person panel established by the Coronavirus Aid, Relief, and Economic Security Act, during the group’s first public hearing to address the efficacy of the Main Street Lending Program (MSLP), which backs loans to small and medium-sized businesses with up to 15,000 employees.

14 years in 14 days: Inside the chaotic rollout of the SBA’s PPP loan plan to save America’s small businesses (subscription)

FORTUNE, Anne Sraders, (April 29, 2020) | Nick Gitsis has been working hard to see his small family restaurant through the coronavirus crisis. Located in what he describes as a “sleepy town” in Warsaw, N.Y., Gitsis’s business, Silverlake Family Restaurant, has been getting creative to keep the money coming in and to retain its 25 employees. “We have a drive-thru window for takeout, but we’re even selling some bread and cheese and milk and cucumbers to make it easy for the people who don’t want to get exposed in the grocery stores,” he tells Fortune. 

Businesses Owned by Private Equity Are Left Out of Bailout Loans Again

Barron's, Luisa Beltran (Updated April 23, 2020) | A second round of relief funding is on the way for small businesses, but don’t expect loans to go to many companies controlled by private equity.

No major relief expected for portfolio companies

Pensions & Investments, Hazel Bradford and Arleen Jacobius, (April 20, 2020) | Help from the federal government during the growing economic crisis is not expected to do much for the portfolio companies of private equity and venture capital firms, which are already starting to decide which ones might survive.

Fed’s Coronavirus Stimulus Offers Taxpayer Cash to Buyout Firm Companies

Wall Street Journal, Chris Cumming (April 16, 2020) |  Private-equity firms won a victory in getting access to stimulus funds intended to blunt the economic pain of the coronavirus, after missing out on their first effort to secure government cash for their businesses.

California lawmakers back small business aid to private equity-backed companies

Center for Responsive Politics, Ilma Hasan (April 16, 2020) | Small businesses and startups with fewer than 500 employees but controlled by large parent companies including private-equity firms are not currently eligible to get loans under the program. House Speaker Nancy Pelosi (D-Calif.) and House Minority Leader Kevin McCarthy (R-Calif.) — hailing from California and catering to Silicon Valley constituents — want to change the rules to extend support to them. 

Private equity-owned physician practices locked out of CARES Act loans

Becker's Hospital CFO Report, Ayla Ellison, (April 16, 2020) | Private equity firms and many of their portfolio companies, including physician practices and other provider organizations, are unable to access the small business Paycheck Protection Program authorized under the $2 trillion Coronavirus Aid, Relief, and Economic Security Act.

Middle-Market Public Policy Roundup

Middle Market Growth, Benjamin Glick (April 16, 2020) | The Association for Corporate Growth urged congressional leaders to waive restrictions preventing private equity-backed middle-market businesses from obtaining emergency loans under the Small Business Administration’s Paycheck Protection Program. In a letter sent to House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Mitch McConnell, R-Ky., on April 9, ACG advised the lawmakers to amend the SBA’s affiliation rules, which prevent small and midsize businesses with private equity backing from being awarded loans from the agency.

Buyout barons deserve state help too – at a price

Reuters, Liam Proud (April 15, 2020) | Pandemics evoke a certain Old Testament vibe, which makes it tempting to mete out biblical justice when crafting a response. Yet excluding unsympathetic industries like private equity from state aid packages only hurts workers. Better to lend a hand, with strict conditions attached.

Private Equity Managers Face Confusing Federal Aid Puzzle

FundFire, Tom Stabile (April 15, 2020) | Private equity fund managers struggling in recent weeks to adjust to a Covid-19-shuttered global economy are now realizing that many of their portfolio companies may not qualify for – or in some cases may steer clear of – new federal aid programs responding to the pandemic.

Fund managers maneuver to get federal aid on payrolls

Roll Call, Jim Saska (April 14, 2020) | Private equity- and venture capital-backed small businesses have had a tough time accessing a massive new aid program enacted last month to help them through the COVID-19 pandemic, given regulators’ concerns that the firms’ overall portfolio of companies might be anything but small.

Private Equity Pushes for Access to Cares Act Small-Business Loans

Barron's, Luisa Beltran (April 14, 2020) |  The $2 trillion Cares Act is meant to help small businesses. But one segment of this group can’t access $350 billion in loans that are meant to help them ride out the Covid-19 recession.

PPP Loans: Do Private Equity And Venture Capital Backed Companies Qualify?

Forbes, Jason B. Freeman (April 10, 2020) | The Coronavirus Aid, Relief and Economic Security Act—better known as the “CARES Act”—is the largest economic relief bill in U.S. history.  It represents a $2 trillion relief package designed to stabilize the U.S. economy.  Its flagship offering?  The “Paycheck Protection Program” (“PPP”), a loan initiative designed to provide funds to small businesses as they ride out the COVID-19 storm.  And a critical sector of the economy is asking one very important question: Do venture capital (“VC”)- and private equity (“PE”)-backed companies qualify for PPP loans?  

ACG Calls on Officials to Expand Safeguards to Include Venture Backed, PE Owned Lower-Middle Market Firms

ABL Advisor (April 10, 2020) | Survey results published today by the Association for Corporate Growth (ACG), a worldwide network of 90,000 middle-market professionals, show a devastating impact if Congress votes to again exclude lower middle-market companies, majority-owned by venture capital, private equity, or other private capital providers, from the 7(a) loan program created under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Private Equity Sees Help in Fed’s New Coronavirus Stimulus

Wall Street Journal, Chris Cumming (April 9, 2020) | Private-equity firms expect to have access to the Federal Reserve’s new $2.3 trillion lending program, a relief for an industry that feared being shut out of stimulus spending designed to offset economic damage from the coronavirus pandemic.

The CARES Act Affiliation Rule Will Exclude Too Many Small Businesses: Legal Experts

Value Walk, Jacob Wolinsky (April 3, 2020) | Many lower/middle market companies with private backing may be precluded from applying for financial assistance through the Coronavirus Aid, Relief, and Economic Security AKA CARES Act, given the current Small Business Administration (SBA) “affiliation rules.” The application of the SBA’s current rules would force many smaller companies to aggregate their employees with those of other unrelated companies because they have common equity investors, resulting in these companies surpassing the 500-employee threshold, ultimately being left out of receiving financial assistance.

Nonprofit names intercollegiate competition winners

Grand Rapids Business Journal, Rachel Watson (April 3, 2020) | The local chapter of a national nonprofit association named the winners of an annual business competition. The Association for Corporate Growth Western Michigan (ACG Western Michigan) last week announced the undergraduate and graduate-level winners of its 12th annual ACG Cup Competition.

Despite Contraction, PE-backed Companies Could Weather Credit Strain

Middle Market Growth, Benjamin Glick (March 26, 2020) | The coronavirus outbreak struck the economy hard and fast. The pandemic’s economic impact is expected to be widespread and will put significant strain on credit markets, but private equity-backed companies are in a strong position to weather a potential lending crunch.

ACG Global cancels InterGrowth 2020, due to CDC event guidance on the coronavirus

Mergers & Acquisitions, Mary Kathleen Flynn (March 16, 2020) | ACG Global has canceled InterGrowth 2020, the middle market's largest event of the year, due to event guidance issued by the Centers for Disease Control and Prevention. Here is the letter from CEO Tom Bohn in its entirety.

ACG Names Veterinary Executive as New Leader

ABL Advisor (October 1, 2020) | The North American Veterinary Community (NAVC) announced CEO Thomas M. Bohn, CAE, MBA, has accepted a new opportunity to lead the Association for Corporate Growth® and will resign from the NAVC at the end of 2019. Eugene O'Neill, NAVC Deputy CEO and Chief Financial Officer has been appointed by the Board as interim CEO. 

Association for Corporate Growth announces new board members

Phoenix Business Journal, Serena O'Sullivan (Sep 19, 2019) | The global Association for Corporate Growth has added new members to the international group's board of directors who will serve through 2020.