(This article was updated on Oct. 30 to reflect new terms in the Main Street Lending Program.)
With the Main Street Lending Program likely to be launched in the coming days, the Federal Reserve has once again announced updates that expand the scope of the program.
The adjustments include lengthening the term of the loans, easing the repayment rules and expanding the sizes of the loans, all of which will expand the pool of available borrowers and eligible lenders.
The moves come as some in the business community have expressed doubt over the program as a viable tool to support small and medium-sized businesses, in part because of restrictions over compensation, share buybacks and dividend payments.
Yet Federal Reserve Chairman Jerome Powell was unbowed in Monday’s announcement.
“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,” he said.
Originally announced on March 23, the program has generated much feedback, all of which has helped the Federal Reserve determine the structure and terms of the program.
At this point, lenders that may not have elected to participate in the program under the prior terms should be reviewing these updates and communicating with potential borrowers to re-evaluate their interest in the program.
Program term changes are as follows:
For more information on how the coronavirus is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.
