- Federal Reserve lending facilities that were set to expire on Sept. 30 extended through Dec. 31
- Extension occurs amid rising jobless claims and severe contraction of U.S. GDP in second quarter of 2020
- Substantial five-year loans offered at low interest rates, but with several restrictions
The Federal Reserve’s Main Street Lending Program, created in response to the detrimental economic effects of the COVID-19 pandemic, has been extended through December 31. The program was originally set to expire on Sept. 30.
The Main Street Lending Program is a low-interest loan available to companies with 15,000 or fewer employees and annual revenues up to $5 billion. Two programs offer minimum loans of $250,000. Borrowers must repay the loan over five years and are subject to several restrictions, including a reduction of the loan based on any portion of a previously awarded Paycheck Protection Program loan that has not been forgiven.
The extension occurs amidst a 32.9 percent annual decline in real GDP in the United States during the second quarter of 2020. Weekly jobless claims were up by 1.43 million.