The Federal Reserve has once again altered the terms of its $600 billion Main Street Lending Program to reach more small businesses. The minimum loan size for both for-profit businesses and nonprofits is now $100,000, down from a $250,000 loan minimum. In addition, Paycheck Protection Program loans of up to $2 million now will be excluded from calculating the size of a possible Main Street loan, the Fed announced Friday. New versions of the loan documents will be available in the coming days, the agency said.
The adjustments are the latest efforts to make the program more attractive — and more useful — to small businesses during the pandemic. The program was introduced as part of a $2.3 trillion package of financial aid funded in part from the CARES Act signed into law in March. However, as of Friday, per the Federal Reserve, banks had made just 400 loans totaling $3.7 billion through the program. The program debuted with a $1 million loan minimum before that amount was reduced to $500,000 in April and then $250,000 in June. The amounts compare to funding obtained through the Small Business Administration‘s PPP loans, where the average loan size was just over $100,000. Through PPP, 5.2 million loans were approved for $525 billion, according to the SBA.