BREAKING: US Federal Reserve on Thursday has released long-awaited details regarding its Main Street business lending program and several other initiatives it is undertaking to backstop the reeling US economy.
“The Fed’s role is to provide as much relief and stability as we can during this period of constrained economic activity, and our actions today will help ensure that the eventual recovery is as vigorous as possible.”
The Main Street loans would be a minimum of $1 million and a maximum of either $25 million or an amount that “when added to the Eligible Borrower’s existing outstanding and committed but undrawn debt, does not exceed four times the Eligible Borrower’s 2019 earnings before interest, taxes, depreciation, and amortization,” whatever is less, according to a Fed release.Terms would see an interest rate equal to the Fed’s Secure Overnight Financing Rate, currently 0.
A special-purpose vehicle that Fed created jointly with the Treasury Department will purchase 95 percent of the loan while the financing institution would hold the other 5 percent.
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