The U.S. Federal Reserve has expanded its Main Street Lending Program to allow more small and medium-sized businesses to receive support.
The Federal Reserve Board on June 8 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 for the program. The result provides borrowers with significantly 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.
"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 H. Powell said in a release. "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."
The changes include:
Nonprofit organizations play a critical role throughout the economy, and the Board is working to establish a program soon for these organizations.
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. The form participation agreement and other legal forms will be updated to align with the changes announced today. Additional frequently asked questions and answers for lenders and borrowers are also available.
For additional information and links to related Federal Reserve documents, visit this link.