Fed Extends Small and Midsize Business Support
The Federal Reserve Board on Monday expanded its Main Street Lending Program to allow more small and medium-sized businesses to be able to receive support.
The Board lowered the minimum loan amount, raised the maximum loan limit, adjusted the principal repayment schedule to begin after two years, and extended the term to five years, providing borrowers with greater flexibility in repaying the loans. The Board expects the Main Street program to be open for lender registration soon and to be actively buying loans shortly after opening.
“Supporting small and mid-sized businesses so they are ready to reopen and rehire workers will help foster a broad-based economic recovery,” Federal Reserve Chair Jerome Powell said in a statement. “I am confident the changes we are making will improve the ability of the Main Street Lending Program to support employment during this difficult period.”
Changes include lowering the minimum size for certain loans to $250,000 from $500,000; increasing the maximum loan size for all facilities; increasing the term of each loan option from four to five years; delaying principal payments for two years, rather than one; and raising the Fed’s participation to 95% for all loans.
The Main Street Lending Program was established with the approval of the Treasury Secretary and with $75 billion in equity provided by the Treasury Department from the CARES Act.
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June 10, 2020 at 08:20AM
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