Fed releases statement on expansion of ministry loan program
- Fed says main Street facility to have 3 loan options
- Fed widens program to more levered firms, for more risk sharing
- 3 options are new loans, priority loans, expanded loans
- maximum business size to be 15,000 employees, $5 billion of revenues
- start date for Main Street facility to be announced soon
- ups maximum eligibility business size, trims minimum loan size
- program will now offer more options to wide set of small and medium-sized firms
- buyers will also pledge today have a reasonable basis to believe they can meet obligations for at least 90 days and do not expect to file for bankruptcy during that time
- Fed also expanding pool of eligible businesses
- lenders will apply industry specific expertise to underwrite an estimate borrowers incomes
- borrowers under Main Street program will commit to follow compensation, stock buyback, and dividend rules applied to direct loans under cares act and will have commercially reasonable efforts to maintain payroll
- under new option lenders would retain a 15% share of the loans for borrowers requiring greater leverage
