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
HKMA Enhances Loan Guarantee Scheme to Alleviate Pressure on SMEs
HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.
EBA Proposes Standards for Supervisory Cooperation Under IFD
EBA launched consultations on the regulatory and implementing technical standards on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms.
BoE Sets Out Plan to Transform Data Collection from Financial Sector
BoE has set out a three-phased plan to transform data collection from the UK financial sector over the next decade.
BIS Issues Updates on Technology Initiatives on Cross-Border Payments
BIS recently made a couple of announcements with respect to the planned and ongoing work in the area of financial technology.
ESRB Updates List of Macro-Prudential Measures in February 2021
ESRB updated the list of national macro-prudential measures applied by each member state in the European Economic Area.
BoE Survey Shows Positive COVID Impact on Outsourced Banking Services
BoE has set out results of a survey on the impact of COVID-19 events on the use of machine learning and data science.
ECB Issues Opinion on Proposal to Regulate Crypto-Asset Markets in EU
In response to a request from the European Council and Parliament, ECB published an opinion on the proposed regulation on markets in crypto-assets.
APRA Announces Aggregate Committed Liquidity Facility for Banks
APRA announced the updated aggregate amounts for the 2021 Committed Liquidity Facility (CLF) established between the Reserve Bank of Australia (RBA) and certain locally incorporated authorized deposit-taking institutions that are subject to the Liquidity Coverage Ratio (LCR).
ECB and UK Authorities Agree on Post-Brexit Supervisory Cooperation
ECB published supervisory Memorandums of Understanding (MoUs) with UK as well as other European and non-European authorities.
EIOPA Outlines Strategic Supervisory Priorities for Insurance Sector
EIOPA identified business model sustainability and adequate product design as the two EU-wide strategic supervisory priorities.