Fed’s Main Street Covid Loan Program Braces for Wave of Defaults

A Federal Reserve pandemic program aimed at supporting mid-size businesses is now having the opposite effect on some of them, burying them in high interest rates and balloon payments and leading to layoffs at companies struggling to stay afloat.

The central bank designed the Main Street Lending Program to help businesses that were generally too big to apply for forgivable loans through the Paycheck Protection Program and too small to tap US capital markets. The program, which marked the Fed’s first effort to systematically support American businesses in such a way since the Great Depression, ultimately made 1,830 adjustable-rate loans ...