FED RESERVE EXPANDS ITS MAIN STREET LENDING PROGRAM TO ALLOW MORE BUSINESSES TO RECEIVE SUPPORT
On June 8, 2020, the Federal Reserve Board 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 afterwards.
The changes include:
Lowering the minimum loan 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 to five years, from four years;
Extending the repayment period for all loans by delaying principal payments for two years, rather than one; and
Raising the Reserve Bank's participation to 95% for all loans.
The Main Street Lending Program will also accept loans that were originated under the previously announced terms, if funded before June 10, 2020.
Click here for additional details on the changes.