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WASHINGTON — Federal Reserve Chairman Jerome Powell said Main Street Lending Program loans are not in high dem&, but he reiterated the central bank’s commitment lớn continue making adjustments that could attract more borrowers.

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The program, aimed at helping small & midsize businesses stay afloat during the coronavirut pandemic, is making loans available through third-các buổi tiệc nhỏ banks to lớn companies with up to lớn 15,000 employees or up to $5 billion in annual revenue.

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Banks have been able khổng lồ register as eligible lenders since June 15 with the Federal Reserve Bank of Boston, which is administering the program. Once that registration process is complete, banks can begin making Main Street loans under the appropriate terms.


Powell told the House Financial Services Committee Tuesday that about 300 banks have registered as lenders so far, and that the Fed has had “a lot of interest” from lenders looking lớn participate.

But banks aren’t reporting an influx of demand from potential borrowers, he said.

“What the banks tell us is that it’s sort of a mixed thing,” Powell said. “They’re not getting a ton of interest from borrowers, and many say they expect that lớn change over the course of the next few months.”


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Fed Chairman Jerome Powell says the Fed is open lớn making tweaks to lớn the Main Street Lending Program, but that it has not yet considered eliminating the minimum loan amount of $250,000.

The $600 billion Main Street Lending Program — which was established using funding appropriated lớn the Treasury Department from the coronavi khuẩn relief package — has been met with criticism from some who feel that the minimum loan of $250,000 is simply too high to work for many smaller businesses, and that the calculations that determine the appropriate loan amount would disqualify some companies.

“For many nonprofits and small businesses, earnings before interest, taxes, depreciation and amortization is not widely used metric,” said Rep. Lacy Clay, D-Mo.

Powell said that while EBITDA is a “widely used” metric, there are many other metrics that the Fed is considering along with Treasury.

“One of them — probably the next one in line — is something along the lines of asset-based và that’s something we’re looking at with the Treasury.”

Treasury Secretary Steven Mnuchin also testified alongside Powell Tuesday in a hearing to lớn examine the execution of coronavirus relief.

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But Powell said the Fed has not yet considered eliminating the minimum loan amount of $250,000.

“We can, once we get up & running, look at lowering it again, but you get inkhổng lồ a very different kind of lending when you’re down lower, and these are really personal loans rather than business loans,” he said. “We could look at that, but that would be something we’d look at once we get up và running.”

Both Mnuchin và Powell also addressed commercial real estate, which some have sầu identified as the pandemic’s next major credit risk, & said they have looked inkhổng lồ establishing an emergency lending facility under the Fed’s 13(3) authorities.

“This is a problem we have not addressed yet,” said Rep. Andy Barr, R-Ky., adding that commercial real estate borrowers are unable to lớn service their debt without incoming revenue. “I think we’re going lớn see, without intervention, a wave sầu of foreclosures and defaults.”

Mnuchin said Treasury & the Fed have not yet figured out a way lớn set up an emergency lending facility for commercial real estate.

“It’s not out of a laông chồng of interest or a laông xã of desire,” he said. “There are structural problems.”

Mnuchin added that direct fiscal support might be more beneficial for commercial real estate borrowers as opposed to lớn saddling them with more debt.

“One of the things we want lớn look at ... is additional support for these hardest-hit industries,” he said. “As has said, there’s a difference between lending và spending.”

Powell agreed that “more debt may not be the answer here.”

“Debt doesn’t solve sầu every problem,” he said. “You’ve got people who can’t currently service debt, you’ve got these inflexible arrangements, và so there’s a serious problem here that needs lớn get fixed và we’re racking our brains lớn see how it could be something we could do by lending.”


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