Treasury, Fed setting up new lending facility for large businesses

Treasury, Fed setting up new lending facility for large businesses

The Treasury Department and Federal Reserve are working on a new lending facility for large businesses that are not investment grade as a way to help them weather the coronavirus downturn, Treasury Secretary Steven MnuchinSteven Terner MnuchinPhase-four virus relief hits a wall On The Money: Senate aims to quickly approve more small-business aid | Dems seek conditions on new funds for small-business loans | Pelosi says next round of relief will top T House GOP leaders back effort to boost small-business loans MORE said Wednesday.

Speaking on CNBC, Mnuchin said that the new “main street lending facility” would be available for companies with more than 500 workers that don’t have the same credit status as other large firms.

Small businesses, with fewer than 500 employees, can already apply to a fund with $349 billion in loans that was established as part of the $2.2 trillion coronavirus relief package President TrumpDonald John TrumpCDC updates website to remove dosage guidance on drug touted by Trump Trump says he’d like economy to reopen ‘with a big bang’ but acknowledges it may be limited Graham backs Trump, vows no money for WHO in next funding bill MORE signed into law on March 27.

The new fund for larger businesses would be housed at the Federal Reserve and capitalized by major investors. The Treasury Department would then be able to offer loans at reasonable rates.

“It’s a very real effort,” Mnuchin said, adding that he was involved in daily calls on the subject. “We hope to have an announcement this week with the details on that and get it up and running as soon as we can.”