Economics
Fed Cuts Main Street Loan Minimum by 60%, Widening Borrower Pool
- Expansion comes in wake of no further fiscal stimulus
- Banks will get higher fees for small loans in incentive push
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The Federal Reserve sharply reduced the minimum loan size in its Main Street Lending Program, potentially opening the emergency facilities to more U.S. businesses at a time when Congress remains deadlocked on additional aid.
By lowering the minimum loan size to $100,000 from $250,000, the Fed on Friday was responding to widespread calls to make Main Street easier to access for small businesses battling to survive the coronavirus pandemic. Fewer than 400 loans have been made since the program went operational in July for a total of $3.7 billion, a fraction of the total $600 billion potentially available.