The Main Street Lending Program is designed to reach small and medium-sized businesses that are too big to benefit from the Treasury Department’s Paycheck Protection Program (SETH HERALD)

Washington (AFP) – The US Federal Reserve said Thursday it is expanding its business loan program to reach more firms as companies struggle to weather the impact of the coronavirus shutdowns.

The Main Street Lending Program, which the Fed announced but has not yet launched, was designed to reach small and medium-sized businesses that are too big to benefit from the Paycheck Protection Program run by the Treasury Department.

After hearing from thousands of firms, the Fed board “decided to expand the loan options available to businesses, and increased the maximum size of businesses that are eligible for support under the program.”

With the expansion, businesses with up to 15,000 employees or as much as $5 billion in annual revenue are now eligible, compared to the initial program terms, which limited the size to 10,000 employees and $2.5 billion in revenue. 

In addition, the Fed lowered the minimum loan size to $500,000 from $1 million.

“A start date for the program will be announced soon,” the Fed statement said.

Unlike PPP loans, which turn into grants as long as most of the funds are used to pay workers, the Main Street loans are not forgivable and go only to businesses that were solvent before the crisis.

The Fed in recent weeks has rushed out a series of programs to pump liquidity into the US economy, including buying unlimited amounts of US Treasury debt, corporate bonds and mortgage-back securities.

It also is considering a separate program to help nonprofit organizations, which play a “critical role” in the economy, the statement said.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.