The Federal Reserve is making some changes to its Main Street loan program, which is supposed to be aimed at small and medium businesses.

It hasn’t been as popular as the Paycheck Protection Program – the Fed has so far only granted about 400 loans. Now he says he is lowering the minimum amount that businesses can borrow to $ 100,000.

By allowing companies to take out smaller loans, the Fed said he hopes more companies will participate.

“We can definitely find places to use the money,” said Ashwin Deshmukh, owner of Manhattan Cocktail Bar Short Stories. He said he was applying for a loan on Main Street.

Unlike his Paycheck Protection Program loan, this one would not be forgivable and would have to be paid off in five years.

“It gives us a little break to undertake something that we have to pay back on a five-year basis, when most companies don’t know if they’ll be there in five months, let alone five years,” Deshmukh said. mentionned.

The interest rates of the loan are north of 3%.

Matt Hetrick heads the accounting firm Harmony Group. “You’re talking about loans with very, very similar terms to the loans you would get from banks, say, before the pandemic. ”

Some companies could benefit from the Fed’s program, said John Lanza of accounting and consulting firm CohnReznick, such as large companies with a few hundred employees and companies that planned to grow before the pandemic.

“We hope to open a new location at the end [of] 2020. We hope to start a new business in 2021, ”Lanza said. “These funds could potentially be used for that. “

But that brings us back to the issue of business confidence. Hetrick said in today’s environment, “There can’t be a lot of businesses, especially in the small business community, that are sitting there saying, ‘Hey, I feel a lot better with it. what I can see in four years; I’m going to be awesome. ‘”

Two bankers who deal with many small businesses told me that they simply saw no point in having their clients join the Main Street loan program.