WSJ recently brought up an article on Fed’s Main Street Lending Program, glaring a forerunner of the program, City-National Bank of Florida.
“The Main Street Lending Program works like this: businesses with revenues of up to $5 Bn or fewer than 15,000 employees can apply for loans of at least $250,000 from participating banks. Banks can then, typically, sell 95% of the loan to the Fed. Businesses have five years to repay the loans, and they can defer principal payments for the first two years.”
The Wall Street Journal, Orla McCaffrey
There’s no forgiveness with this loans, but the rates are competitive: around 3.2% nowadays.
In my judgement, this is a great program. Why aren’t mare businesses getting into it ? It seems to be there aren’t enough lenders willing to tap into it (fewer than 100 banks have used it as of the end of Sept.)
The example cited is City National Bank of Florida and their customer, Mango’s Tropical Cafe. who got a $10 MM loan.
“Before March 16, Mango’s was bringing in about $50 MM annually, more than enough to employ around 450 people and to cover payments on mortgages of almost $50 MM.”
Orla McCaffrey, WSJ