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Fed changes rules to provide more loans to small businesses



The Federal Reserve announced on Friday that it would issue loans as low as $100,000 and reduce loan fees. Previously, its minimum loan amount was US$250,000.

David Kong, Best Western’s chief executive, said: “The bank is not borrowing money from failed companies.” One of Best Western’s chief executives wrote a letter calling for changes to the Main Street plan. SMEs are struggling and cannot get help. “

The Main Street Loan Program aims to support small and medium-sized enterprises and non-profit organizations that were financially sound before the Covid-19 pandemic but are now unable to obtain credit on reasonable terms.

To date, the program has provided nearly 400 loans totaling US$3.7 billion, with an average of approximately US$9 million per loan.

Unlike the “Salary Protection Program”
; approved by Congress, the program stipulates that if the money is used to retain employees, these loans can be forgiven, while loans from the main street loan program need to be repaid. But it does give borrowers time to recover from the pandemic by deferring the payment of principal and interest.
The chairman of the Federal Reserve warned that if the US cannot control the coronavirus, it will be an economic tragedy
Federal Reserve Chairman Jerome Powell has been urging Congress to provide more stimulus measures to support the US economy. He said at a press conference last month that he hopes to change the terms of the plan, but the content of the Federal Reserve is restricted by law. This is allowed.

He said at the time: “If you look at the law… it is clear that we only provide loans to solvent borrowers.” “That said, we are continuing to work on improving Main Street to make it more widely available-making it more effective Any company that needs it and can provide loans is very useful.”

-Matt Egan of CNN Business wrote this report


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