Federal Lending Program Begins for Small and Medium-Sized Businesses The Federal Reserve's Main Street Lending Program, which was announced at the beginning of April, is finally underway. The program encourages banks to lend to small and medium-sized businesses that have been hit hard by the COVID-19 pandemic, but only businesses that were in "sound financial condition" before the pandemic are eligible. Businesses have to apply for the loans with their banks, which have to register as main street lenders. Five-year loans ranging between $250,000 to $300 million will be offered with no principal due for two years and no interest due for one year. Businesses with up to 15,000 employees or up to $5 billion in annual revenue are eligible. The central bank will purchase 95% of each loan, assuming the majority of the risk and allowing banks to make more loans.
