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The Federal Reserve Board reduced the minimum loan size for its Main Street Lending Program from $250,000 to $100,000 and adjusted fees to encourage the provision of smaller loans.
The Fed and Treasury Department also issued an FAQ clarifying that Paycheck Protection Program loans of up to $2 million may be excluded for purposes of determining the maximum loan size under the MSLP if certain requirements are met.
The program is designed to purchase 95 percent of each eligible submitted loan, with lenders retaining a 5 percent interest. The Fed said the program, which has $75 billion in equity authorized under the CARES Act, has made less than 400 loans worth $3.7 billion.
ICBA has since April called on the Fed to lower the minimum loan threshold to $100,000 to ensure it serves Main Street businesses. The program initially had a threshold of $1 million, which was previously lowered to $500,000 and $250,000.
ICBA has also expressed concerns that the program is too complicated and recommended dropping the requirement that lenders retain a 5 percent interest in the loans they originate.