Federal Reserve Chairman Jerome Powell said Friday the central bank's long-awaited program to lend to small- and medium-sized businesses is about to get off the ground.
The Main Street lending facility, which will target companies with up to 15,000 employees, has been difficult to set up but is just about ready, Powell told Princeton University economist and former Fed official Alan Blinder in a webinar interview.
"We're days away from making our first loans in Main Street," he said. "We have three facilities that are part of it. They're meant to reach out to different parts of that broad space. In the meantime, many of those companies are finding that they can borrow from banks. Others are waiting for us to get our facilities up and running."
"It is far and away the biggest challenge of any of the 11 facilities that we've set up," he added.
In addressing the various issues that have come up during the coronavirus pandemic and the ensuing economic lockdown that authorities have used to fight the disease, the Fed has devised a series of lending and liquidity programs targeted at a variety of fronts.
Most of those efforts have been directed at the functioning of the capital markets. More recent moves have been toward buying up state and municipal bonds to help those cash-strapped governments, and corporate bonds held by companies that saw debt downgrades as a result of the virus.
Those programs, though, have come under criticism for focusing more on Wall Street than Main Street, so getting the lending program off the ground has been critical.
Powell said an initial term sheet released for the program saw "a couple thousand" responses on areas for improvement, sending the Fed back to make the appropriate changes.
"As we've shown, we're willing to learn from experience," he said.
The loans will range from $500,000 to $100 million, though Powell said "I could imagine us expanding on either end," depending on need.