Fed Lending Faces a Tough Slog on Main Street

The Federal Reserve has done much to support markets, stabilize financial conditions and backstop key areas of the U.S. debt and credit markets. But challenges remain. One big one is to get its Main Street Lending Program up and working well. As the Fed describes it, this program “is intended to facilitate lending to small and medium sized businesses” by banks and savings and loans. The program envisions as much as $600 billion of borrowing from a special Fed facility backstopped by $75 billion of Treasury funding.

The program consists of two parts: the Main Street New Loan Facility and the Main Street Expanded Loan Facility. The former would provide new loans to eligible borrowers and the latter would provide funds to increase the size of loans made before April 8.