Landmark Fed business rescue struggles amid economy’s woes

Photo: The Federal Reserve building in Washington, D.C. | Mark Wilson/Getty Images. Article by Victoria Guida.

The Federal Reserve’s $600 billion “Main Street” lending program, designed to rescue companies whacked by the coronavirus pandemic, is sputtering just weeks after it was launched, doling out only a handful of loans.

The problem? It’s not set up to bail out the companies that need it the most.

The emergency program, aimed at midsize companies, isn’t open to businesses with high levels of debt — including hotels with big mortgages, as well as firms that were already struggling before the crisis, like certain retailers and oil and gas companies. And many banks are reluctant to participate because they still have to do extensive underwriting and face risk if a loan defaults. […]

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