Fed Chair Jerome Powell speaks to reporters in October 2019. Photo courtesy of the Federal Reserve.

More than two months after the CARES Act authorized a lending program for small and mid-sized businesses affected by the coronavirus pandemic, the Federal Reserve’s Main Street Lending Program has launched. 

Lender registration opened Monday morning, and the program’s administrator, the Federal Reserve Bank of Boston, said in a statement that it is encouraging lenders to begin making loans immediately. 

Lenders looking to participate in the program must register through an online portal, where they will be able to sign and submit registration forms and agreements. 

The Federal Reserve recently expanded the Main Street Program. It is open to companies with 15,000 employees or fewer, or with 2019 annual revenues of $5 billion or less. Businesses apply for Main Street loans through a participating lender, and the lender will work with the business to determine eligibility and approve the loan. 

Lenders will be expected to assess a potential borrower’s financial condition and apply their own underwriting standards when evaluating financial condition and creditworthiness. Nonprofit organizations are not eligible for Main Street loans. The Federal Rerserve said last week that it is working on a lending program for nonprofits. 

The program offers five-year loans from $250,000 to $300 million with floating rates, principal payments deferred for two years and interest payments deferred for one year. Unlike Paycheck Protection Program loans, Main Street loans are not forgivable. Eligible businesses that participated in the PPP can apply for Main Street loans. 

“The Main Street Lending Program is designed to help credit flow to small and medium-sized businesses that were in sound financial condition prior to the COVID-19 pandemic but now face cash flow interruptions,” the Boston Fed said in a statement. 

If required documents are complete and the transactions are consistent with the Main Street facility’s requirements, the program intends to purchase 95 percent of each eligible loan. 

“By purchasing 95 percent of the loans, the Federal Reserve will share in the risk that would otherwise need to be absorbed solely by lenders and will create additional balance sheet capacity for lenders to extend more loans,” the Boston Fed said. 

The Boston Fed said the Main Street Lending Program would begin purchasing loan participations through the lender portal soon.