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The Federal Reserve on Thursday expanded the scope of its Main Street lending program, broadening the pool of eligibility to include bigger businesses and offering a different set of loans.
The U.S. central bank launched the lending program earlier this month to help get money to small- and medium-sized businesses impacted by the coronavirus pandemic, which has forced a broad shutdown of the nation's economy.
Under the $600 billion program, businesses can secure loans of up to four years from banks at low rates. Payments can be deferred in their first year, although the loans must eventually be repaid.
Businesses with up to 15,000 employees and $5 billion in revenue can now apply for financing through the program, up from the previous limit of 10,000 workers and $2.5 billion in revenue.
The Fed also introduced a different loan option. There are now three categories: new, priority and expanded. New loans have a limit of either $25 million or four times 2019 adjusted earnings before taxes, interest, depreciation and amortization (EBITDA), while priority loans have a limit of either $25 million or six times EBITDA. Expanded loans, meanwhile, have a maximum of $200 million, or six times EBITDA.
New and priority loans have a minimum size of $500,000. Expanded loans are for over $10 million.
The Fed did not specify when the program will be running.