The Federal Reserve Bank of Boston Wednesday released a list of the banks that will lend to new customers through the central bank’s Main Street Lending Program, an initiative designed to prop up mid-sized companies that are too big for the Paycheck Protection Program but too small to access capital markets.
The program became fully operational on Monday after being announced in March; Federal Reserve Chair Jerome Powell previously indicated that it would be up and running by June.
The banks are listed by state on the Boston Fed’s website; Bank of America is the only major national bank included on the list.
The New York Times points out that the Fed has not yet released a full list of participating lenders, though Fed leaders noted earlier that about 300 lenders had signed up to participate.
The program’s launch comes after complaints about lengthy delays which some say hurt businesses already in crisis, and as a result, may have been forced to seek assistance from other sources.
“The general feeling among our members is too late and not enough,” David French, senior vice president of government relations at the National Retail Federation, told Politico last month.
The Federal Reserve has expanded the Main Street Lending facility twice since it was announced in March in order to make the loans more accessible to more companies. Those changes were in part prompted by public concern that too-strict terms might deter borrowers and lenders from participating. The program now offers five year loans ranging from $250,000 to $300 million, with no principal payments required for the first two years. The Fed, with a $75 billion backstop from the Treasury Department, will buy 95% of certain Main Street loans (depending on how risky they are) to take the pressure off banks’ balance sheets.
The Fed is bound by a long-standing mandate to avoid risky investments and ensure the money it lends is repaid in full— that’s why Federal Reserve Chair Jerome Powell has called the Main Street program “far and away the biggest challenge” the Fed has faced during the coronavirus recession. That’s also why the Treasury Department will back any losses up to $75 billion.