Fed will mantain low rates until economy has weathered coronavirus
Former Dallas Fed adviser Danielle DiMartino Booth, FOX Business contributor Gary Kaltbaum, senior vice president and market strategist for Vision 4 Fund Distributors Heather Zumarraga and Fitz-Gerald Group chief investment strategist Keith Fitz-Gerald provide insight into the Federal Reserve’s decision to keep interest rates at zero during the coronavirus outbreak.
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.
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The U.S. central bank initially launched the lending program 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.
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.
This is a developing story. Please check back for updates.
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