Off The Wire
Fed reduces loan minimum, adjusts terms for Main Street program
Oct 30 (Reuters) - The Federal Reserve made key adjustments on Friday to its Main Street Lending Program, including reducing the loan amount and adjusting fees, to help expand access to the program that has seen little use since it launched over the summer.
The Fed said it was lowering the minimum loan amount to $100,000 from $250,000, complying with a change requested by small business advocates who were concerned the program was not accessible to some mom and pop shops affected by the pandemic. The U.S. central bank also adjusted fees charged by the program to encourage the issuance of smaller loans.
The Fed clarified Friday that Paycheck Protection Program loans of up to $2 million should be excluded when determining loan amounts for the Main Street Lending Program, which could open the program up to more small businesses.
Almost 400 loans totaling $3.7 billion have been made through the Main Street program, the Fed said on Friday. That is a fraction of the $600 billion in loans available through the initiative, which was created as part of the CARES Act with $75 billion in backing from the Treasury Department.
Main Street loans became available to nonprofit organizations over the summer but as of Sept. 30 the nonprofit program had no borrowers, Fed documents show. (Reporting by Jonnelle Marte, Dan Burns and Ann Saphir, Editing by Chizu Nomiyama)