Fed to start buying loan stakes in coronavirus rescue program
WASHINGTON — The Federal Reserve’s Main Street Lending Program is officially open and able to purchase participations in loans that meet the central bank's criteria, the Federal Reserve Bank of Boston said Monday.
The $600 billion program is aimed at helping small and medium-sized businesses stay afloat during the coronavirus pandemic. Loans will be made available via third-party banks to eligible companies with up to 15,000 employees or up to $5 billion in annual revenue.
“This is an important milestone for the Main Street program,” said Eric Rosengren, president of the Boston Fed, which is administering the program. “Given the pandemic’s shock to the economy, and its uncertain duration, support for businesses and their employees through bank lending is critical.”
The Fed through the program is purchasing 95% of all eligible loans. Last month the Fed increased its stake in all loans made through the program, lowered the minimum loan amount from $500,000 to $250,000 and increased the maximum loan size for each of the program's three facilities.
Lenders were able to register for the program and begin making loans as of June 15.
The Boston Fed also said Monday that it would publish in the coming days a state-by-state list of Main Street lenders accepting new customers.