WASHINGTON—The Federal Reserve is extending its middle-market business rescue program to Jan. 8 in an effort to give the central bank more time to process loans that have been submitted leading up to the program’s close.
The Main Street Lending Program was previously set to end Dec. 31, after Treasury Secretary Steven Mnuchin requested that the Fed return all unused funds appropriated by the Coronavirus Aid, Relief and Economic Security Act to backstop several emergency lending programs, including Main Street.
The Fed initially pushed back on the request, arguing that the programs should stay in place until the economy was on a more certain path to recovery,
Still, Mnuchin approved the Fed extending the Main Street Lending Program — which offers loans to companies with either up to 15,000 employees or up to $5 billion in annual revenue — for an additional week into 2021. The extension will “allow more time to process and fund loans” that were submitted to the Fed on or before Dec. 14, the Fed said in a press release Tuesday.
The Federal Reserve Bank of Boston, which is administering the Main Street program, had previously instructed lenders to submit loans by Dec. 14, adding that it was unlikely any loans submitted after that date would be able to be processed in time.
As of Dec. 23 the Main Street program had purchased almost $15 billion in loans, according to the Fed’s weekly balance sheet. Though a far cry from the $600 billion allocated for the program, activity picked up in recent weeks. Data the Fed released earlier this month showed that as of Dec. 2 the program had purchased about $6 billion in loans.
