FED’S RESCUE PROGRAM NOT WORKING, BUSINESSES SAY

Among the 15,000 members of the Association for Corporate Growth who tried to borrow money through the U.S. Federal Reserve’s Main Street Lending Program, 81 percent were unable to, association officials told a Congressional hearing last week.

Under the program, which began this month, the Fed will buy 95 percent of a bank’s loan to a qualifying business. New loans are made for at least $250,000 and additions to existing loans can run to $300 million.

Mid-size companies – those with 500 to 15,000 workers – are having trouble enticing banks into making the loans, business executives said.

“This program is designed for a business that had a disruption in short-term credit, that was in good shape prior to the crisis and that, after the pandemic subsides, would be able to be a viable business as well,” Eric Rosengren, President of the Federal Reserve Bank of Boston, told the Congressional committee. “There are businesses that fit [those] characteristics. We’re seeing some of those businesses” succeeding in securing loans, he added.

“I wouldn’t describe the program as a failure,” said committee member French Hill (R-AR). “But clearly there are impediments” to enticing banks to take part.

TREND FORECAST: All this money pumping provides just a temporary fix that will do nothing to improve the draconian economic blows launched by politicians who have severely damaged businesses across the nation… and around the world.