The Fed on Friday announced it would issue loans as low as $ 100,000 and lower fees on loans. Previously the minimum amount it would lend was $ 250,000.
Chief Executive David Kong, CEO of Best Western, one of the corporate executives wrote a letter calling for changes to the Main Street program, saying: “Banks are not allowed to lend money to businesses are failing. “Small and medium businesses are struggling and they can’t get help.”
The main street loan program is designed to support SMEs and nonprofits in good financial condition prior to the Covid-19 pandemic but currently do not have access to credit on the reasonable event.
So far, the program has made nearly 400 loans totaling $ 3.7 billion, averaging about $ 9 million each.
Unlike the Salary Protection Program approved by Congress, which contains provisions that allow those loans to be forgiven if funds go to employees, loans from the Main Loan Program. Street was requested to reimburse. But it gives borrowers time to recover from the pandemic with deferred repayment of principal and interest.
Fed Chairman Jerome Powell, who has urged Congress to provide more stimulus measures to support the US economy, said in a press conference last month he was looking to change the terms of the chapter. But there are legal restrictions on what the Fed is allowed to do.
“If you look at the law … it’s very clear that we only lend solvent borrowers,” he said at the time. “Having said that, we are continuing to work on improving Main Street, to provide it more broadly – to any company that needs and can lend.”
– CNN Business’ Matt Egan contributed to this report