Yesterday, the Treasury Department sent a letter to the Federal Reserve requesting that funds be returned on December 31st for many of their emergency relief programs, including the Main Street Lending Program.  This announcement created a political uproar. 

I believe that the Main Street Lending Program should continue and stick around.  The minimum loan amount should be increased from $100K to $10 M.    It should be renamed the Middle Market Lending Program, which is what it is, and allow for loans from $10 M to $300 M.  The program is too complicated and cumbersome for the smaller loan requests.

Meanwhile,  Congress should immediately authorize the following changes to the SBA program to encourage growth and bring liquidity to small businesses.    Over 2,200 banks and some non-bank lenders participate in the program today, and we could quickly leverage their infrastructure and resources.   

My proposed SBA changes include:

  • Increase the maximum loan amount from $5 M to $10 M.
  • Increase government guarantees to 90 %.
  • Reduce borrower fees.
  • Increase amortizations on standard SBA 7a loans from 10 years to 15 years.

These changes could quickly bring needed assistance to small businesses.  The infrastructure already exists.  Let’s turn some levers and get our economy moving.