Fed's Main Street lending facility is officially open for business
Lenders are encouraged to begin making loans 'immediately,' the Boston Federal Reserve said
The Federal Reserve announced Monday that its Main Street lending program for small- and medium-sized businesses is officially open for bank registration.
Lenders are encouraged to begin making loans "immediately," the Boston Federal Reserve, which administers the Main Street program, said in a news release.
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The program is designed to help businesses that are too big to tap the government-backed Paycheck Protection Program, but too small to access other avenues of relief offered by the central bank. Companies that were on sound financial footing pre-crisis and only damaged by the outbreak of the virus can tap the program.
Businesses with up to 15,000 employees and $5 billion in revenue can apply for financing through the program.
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Last week, the U.S. central bank lowered the minimum loan to $250,000 from $500,000 and raised the maximum that can be borrowed by small- and medium-sized businesses. It also expanded the loan terms to five years and extended the repayment period for all loans to two years, rather than one.
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"It is very challenging," Federal Reserve Chairman Jerome Powell said of the program at the end of May, "because it's an extraordinarily diverse space. The credit needs of different kinds of companies in different kinds of industries are extraordinarily diverse."
The $2.2. CARES Act signed into law at the end of March provided $454 billion for the Treasury to backstop the various lending programs offered by the Fed. The Main Street lending program was first announced on March 23.