A Helping Hand to Main Street Where and When It Was Needed A Helping Hand to Main Street Where and When It Was Needed

This paper investigates the lending activity of the Main Street Lending Program, which the Federal Reserve established at the onset of the COVID-19 pandemic in spring 2020. Main Street was the largest (by total principal outstanding) of the Federal Reserve's emergency credit and liquidity facilities. The authors find fairly robust evidence that Main Street accomplished its key goal of directing more funds where and when they were most needed. Businesses located in states with more severe declines in commercial activity (as proxied by mobility indicators) and higher infection rates obtained a higher volume of loans from Main Street. Furthermore, the timing of the loans tended to coincide with the need: More loans were applied for and approved when a state experienced an increase in its state-wide infection rate.