Can recent adjustments to the Fed’s loan program help small businesses seeking relief? Chuck Morton, co-chair of Venable’s Corporate Group, was quoted in Inc. discussing several key changes to the Main Street Lending Program. Aimed at small and midsize businesses that were in good financial standing before the crisis, the program is expected to run directly through federally insured depository institutions, including banks, savings associations, and credit unions. The Federal Reserve says it will support up to $600 billion in new loans.
According to the article, after a comment period that attracted more than 2,200 letters, the Fed announced it would widen the eligibility requirements to include both smaller and larger businesses. It also said it would reduce the available loan size for eligible borrowers, and it simplified the pricing of the loans.
“It's a step in the right direction,“ says Morton. “Businesses who've been trying to navigate the complicated alphabet soup [of COVID-19 relief programs] should look at this program. And look at it in conjunction with their existing lenders to see if this additional borrowing could be helpful.“
Morton expects that the Fed will continue to refine the Main Street Lending Program, so this likely isn't the last update to this new loan program.
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