The Fed Just Lowered the Barrier for Its Small Business Lending Program
The Federal Reserve lowered the requirements for its small business lending program to make it more accessible, according to CNBC.
The program has not seen as much activity as the central bank anticipated. Today, they announced that the minimum loan size was reduced to $100,000 from $250,000 and that restrictions on debt for companies participating in the Paycheck Protection Program will ease up.
The program has issued loans amounting to nearly $3.7 billion. The central bank stated that these changes are “two important ways to better target support to smaller businesses that employ millions of workers and are facing continued revenue shortfalls due to the pandemic.” These changes came as a result of complaints from borrowers and lenders that the requirements were too tough. Furthermore, PPP loans are forgivable, but the Main Street loans are not.
Concern about the economy has grown as coronavirus cases hit record highs in the US. Many are calling for additional measures from the Fed to help mitigate the impact rising cases could have on the economic recovery.