FEI has asked the Federal Reserve Board to include offer loan forgiveness to borrowers who receive COVID-19 emergency funding from its Main Street Lending Program. The program was created by Congress as part of the CARES Act. Adopted on March 27, the CARES Act created the Paycheck Protection Program (PPP) to offer loans for businesses with fewer than 500 employees. The program is administered by the Small Business Administration and allows borrowers who adhere to certain criteria to have their loans forgiven. The CARES Act also created the Main Street Lending Program for larger businesses seeking COVID-19 relief. This program, for businesses with 500 or more employees, is being administered by the Federal Reserve Board and, unlike the PPP, does not offer loan forgiveness.
In a letter to Fed Chair Jerome Powell, FEI argued that many large businesses are facing the same challenges as smaller companies in the economic crisis caused by the COVID-19 pandemic and should receive the same incentives to retain staff as smaller companies have been offered through the PPP. With unemployment claims totaling more than 22 million in the U.S. over the past four weeks, every effort should be made to ensure that as many American workers as possible should be kept on payrolls. Adding a loan forgiveness provision to the Main Street Lending Program would be a critical tool for the Fed to preserve jobs and support U.S. businesses.
View the full letter here »