But Boston Fed chief sees more interest among banks and borrowers if the economy worsens; the failed payments company is being investigated for its alleged role in a $100 million caper.
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.
Worried about a lack of demand and that some of their customers are ineligible, community banks are still on the fence about participating in the effort to back loans for businesses recovering from the pandemic crisis.
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.
The firm’s financial woes are mostly a result of overspending, but they have raised questions about how banks’ commercial real estate portfolios might fare if the coworking sector implodes.
Kenneth Montgomery, a top executive at the Federal Reserve Bank of Boston, will head the push to make faster payments available across the industry in the next four to five years.
