In efforts to continue to help small and medium businesses get through the pandemic, the Federal Reserve is reducing the minimum loan size down to $100,000 from $250,000. Along with this they have also decided to ease restrictions on companies that are participating in the Paycheck Protection Program. These decisions were in response to the growing concerns of an economic slow down in the winter due to both COVID and the current stalemate on future stimulus checks.
As cases continue to grow around the world there has also been many talks of future possible shutdown in a number of countries. I think that by making these loans more accessible to these small business it could possibly help them survive another shutdown.
2 comments:
I am very concerned for small businesses during this crisis. Especially with the push for minimum wage to increase, this could become detrimental for many small businesses, who are still important to our economy. It is nice to see the FED thinking about these small businesses. However, if the small businesses are struggling, paying back these loans could be tough for these businesses as well which could become the focal point of this loan decrease.
I believe this is a good step to take in lieu of waiting on a stimulus. Allowing small businesses an outlet while they wait for possible help from the federal government will hopefully extend the period of time in which they are able to survive in a struggling economy. With interest rates low, this seems like a viable option for these businesses to pursue.
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