April 13, 2020 / RACHEL COHRS
Hospitals and other providers will likely be eligible for new loans for mid-size businesses hurt by COVID-19 that would require borrowers to limit pay for highly-compensated employees and executives, according to the Federal Reserve.
The new Main Street lending program is funded by $75 billion from the Coronavirus Aid, Relief, and Economic Security Act. That means $600 billion in financing will be available to businesses with up to 10,000 employees or $2.5 billion in annual revenue. It remains unclear how many hospitals and other providers might qualify because the Federal Reserve did not specify how employees of health systems will be counted.
Borrowers could receive between $1 million and $25 million, but there are strings attached.
Businesses accepting the loans would have to freeze compensation for all employees making more than $425,000 and agree to pay cuts for employees making more than $3 million.
