FED Expands Main Street Lending Program for SMEs to Ease COVID Impact
FED expanded its Main Street Lending Program to allow more small and medium-sized businesses to be able to receive support. The key changes involve lowering the minimum loan amount for certain loans to USD 250,000, increasing the maximum loan limit for all facilities, adjusting the principal repayment schedule to begin after two years, and extending the term to five years, thus providing borrowers with greater flexibility in repaying the loans. FED expects the program to be open for lender registration soon and to be actively buying loans shortly afterward.
The Main Street Lending Program was established with the approval of the Treasury Secretary and with USD 75 billion in equity provided by the Treasury Department from the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The program consists of Main Street Expanded Loan Facility, the Main Street New Loan Facility, and the Main Street Priority Loan Facility, the terms sheets for which have also been published. FED extensively sought feedback and revised the Main Street Program accordingly. The Main Street Lending Program intends to purchase 95% of each eligible loan that is submitted to the program, provided that the required documentation is complete and the transactions are consistent with the requirements of the relevant Main Street facility. The program will also accept loans that were originated under the previously announced terms, if funded before June 10, 2020. Non-profit organizations also play a critical role throughout the economy; therefore, FED is working to establish a program for these organizations as well.
Related Link: Press Release
Keywords: Americas, US, Banking, COVID-19, Credit Risk, CARES Act, SME, Loan Repayment, Main Street Lending Program, FED
Featured Experts
Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Related Articles
UK Government to Set Out Rules on Wind-down of Critical Benchmarks
HM Treasury notified that, after considering all responses, the government intends to bring forward further legislation, when the Parliamentary time allows, to address issues identified in the consultation on supporting the wind-down of critical benchmarks.
EIOPA Launches Stress Test for Insurance Sector in EU
EIOPA launched the 2021 stress test for the insurance sector in EU.
UK Authorities Publish Third Edition of Regulatory Initiatives Grid
UK authorities jointly published the third edition of Regulatory Initiatives Grid setting out the planned regulatory initiatives for the next 24 months.
EC Consults on Regulation on Non-Financial Sustainability Disclosures
EC is requesting feedback on the proposed Commission Delegated Regulation on the content, methodology, and presentation of information that large financial and non-financial undertakings should disclose about their environmentally sustainable economic activities under the Taxonomy Regulation.
OSFI Outlines Prudential Policy Priorities for Coming Months
OSFI has set out the near-term priorities for federally regulated financial institutions and federally regulated private pension plans for the coming months until March 31, 2022.
BIS Announces TechSprint on Innovative Green Finance Solutions
Under the Italian G20 Presidency, BIS Innovation Hub and the Italian central bank BDI launched the second edition of the G20 TechSprint on the lookout for innovative solutions to resolve operational problems in green and sustainable finance.
ACPR Publishes Version 1.0.0 of RUBA Taxonomy
ACPR published Version 1.0.0 of the RUBA taxonomy, which will come into force from the decree of January 31, 2022.
EBA Proposed Regulatory Standards for Central Database on AML/CFT
EBA proposed the regulatory technical standards on a central database on anti-money laundering and countering the financing of terrorism (AML/CFT) in EU.
ECB Responds to EC Consultation on Crisis Management Framework
ECB published its response to the targeted EC consultation on the review of the bank crisis management and deposit insurance framework in EU.
BCBS, CPMI, and IOSCO to Survey Market Participants on Margin Calls
BCBS, CPMI, and IOSCO (the Committees) are inviting entities that participate in market infrastructures and securities markets through an intermediary as well as non-bank intermediaries to complete voluntary surveys on the use of margin calls.
