Fed eases terms of Main Street loans, tells banks to start disbursing
By Howard Schneider and Jonnelle Marte WASHINGTON (Reuters) - The U.S. Federal Reserve eased the terms of its 'Main Street' lending program on Monday, lowering the minimum loan size from $500,000 (393,267.26 pounds) to $250,000 (196,633.63 pounds) and lengthening the term from four to five years to encourage more businesses and banks to participate
By Howard Schneider and Jonnelle Marte
WASHINGTON (Reuters) - The U.S. Federal Reserve eased the terms of its "Main Street" lending program on Monday, lowering the minimum loan size from $500,000 (393,267.26 pounds) to $250,000 (196,633.63 pounds) and lengthening the term from four to five years to encourage more businesses and banks to participate.
In an announcement, the central bank also encouraged lenders to start making the loans to small and medium-sized businesses "immediately" once they are registered with the Fed to participate in the program.
The changes address concerns raised by some lenders, lawyers and small business consultants that the previous minimum loan amount of $500,000 was too large to help many businesses affected by the coronavirus pandemic.
"Supporting small and mid-sized businesses so they are ready to reopen and rehire workers will help foster a broad-based economic recovery," Federal Reserve Chair Jerome Powell said. "I am confident the changes we are making will improve the ability of the Main Street Lending Program to support employment during this difficult period."
Some small lenders previously said they were worried about taking on too much risk. But the Fed is further minimizing the downside for banks and credit unions that participate by purchasing 95% of all loans issued through the program. Previously, the central bank agreed to purchase 85% or 95% of the loan, depending on the type of loan.
The Fed also gave businesses more time to repay their loans, which could help small businesses that would otherwise struggle to pay back the loans. Loans will now last five years and borrowers will not owe payments on the principal for the first two years. Previously, loans were set to last four years, with no payments due the first year.
(Reporting by Howard Schneider and Jonnelle Marte; Editing by Cynthia Osterman and Andrea Ricci)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.