The head of the Federal Reserve Bank of Boston said the central bank had acquired stakes in 32 business loans as of Monday, four times the amount from two weeks earlier.
At its inaugural hearing, the committee appointed by lawmakers to oversee CARES Act implementation pressed for answers about why the Main Street Lending Program is off to such a slow start.
Many big banks say they will focus on existing customers in offering credit through the Federal Reserve’s emergency lending program for midsize businesses. Complex vetting and fear of being inundated are said to be among their concerns.
Banks participating in the Main Street Lending Program were able to register for and offer credit to businesses last month, but the Federal Reserve said Monday it was set to make the effort fully operational.
Participation in the Main Street Lending Program for midsize companies is partly about public service, but the core business rationale is building "a banking relationship that continues on for some time," the Boston Fed chief says.
The Federal Reserve Bank of Boston published details on the terms for lenders and borrowers to participate in the facility intended to provide coronavirus relief funds to middle-market firms.
Federal Reserve Bank of Boston President Eric Rosengren said he expects companies to begin receiving money through the central bank's long-awaited Main Street Lending Program within two weeks.
