The Federal Reserve Board (FRB) has made changes to its forthcoming Main Street Lending Program in an effort to provide support to a wider range of small and midsize businesses that were financially affected by the COVID-19 pandemic. The program adjustments were made in order to quell concerns that, due to the rigidity of the program’s requirements, some companies might not qualify for benefits and some banks might not participate.
The changes to the program include:
- Lowering the minimum loan amounts for certain loans from $500,000 to $250,000 to allow smaller companies and lenders to take part in the program;
- Raising loan maximums (with new maximums being based on the loan type);
- Extending the term of all loan options to five years and lengthening the loans’ principal deferral period from one to two years, giving borrowers more time to repay; and
- Raising the FRB’s participation in all loan types to 95%.
The FRB has not yet announced a launch date for lender registration or its purchase of eligible loans.