Fed’s Main Street pandemic support program off to slow start

The largest loan, for $50 million, went to a Mount Pocono, Pennsylvania, casino operator. That was followed by $12.3 million to a dental practice in Madison, Wisconsin.

The Fed has had trouble from the beginning getting the Main Street program up and running. Critics contend the central bank has made conditions for getting support so stringent that many companies have decided it is not worth the effort.

Under the Feds program, the money it is providing can either be new lending or increases to existing loans. The Treasury Department has allocated $75 billion to offset any losses. Banks make the actual loans but the Fed will buy 95% of the loan to minimize the risks to banks.

The Main Street program requires borrowers to make commercially reasonable efforts to keep all of their workers. But it doesnt require that any laid-off workers be rehired. By contrast, the very popular Paycheck Protection Program requires that at least 60% of the money be spent keeping workers on the payroll. If that requirement is met, the government will forgive the loans.