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The Federal Reserve on Thursday said it was making some adjustments to its planned $600 “Main Street” lending program based on public comments and also said it was mulling a separate approach to meet the” unique needs” of non-profit organizations.
In a statement, the Fed said one adjustment would allow firms with slightly more employees to participate in the plan, which is designed to help firms that are neither too small to get government grants nor so big they can access the capital markets.
Firms with up to 15,000 staff or up to $5 billion in annual revenue are now eligible, compared with the initial plan which was for companies with up to 10,000 employees and $2.5 billion in revenue.
The main thrust of the changes is to open the program up to more participants in as many ways as possible. Minimum loans sizes were reduced and maximum loan sizes were increased. All of the money will be loans and not grants.
Economists have been hoping the Fed would launch the plan quickly given that the coronavirus pandemic and stay-at-home orders are crippling businesses.
The Fed said that “a start date for the program will be announced soon.” The central bank said officials are working around the clock to get the program started and said there would be a series of public events to educate the public about the program.
Fed Chairman Jerome Powell said Wednesday he’s worried the coronavirus epidemic is going to cause lasting damage to the economy and that the federal government will likely need to spend more to help the economy.
On the issue of nonprofit groups, the Fed said that it was evaluating a separate approach to meet their unique needs.
Nonprofits are not eligible for the Main Street lending program at the moment, the Fed said. The central bank is seeing if it can come up with a lending program that would have high demand from the charitable sector.
