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Fed to Provide Liquidity for PPP Loans

Media Center:Fed to Provide Liquidity for PPP Loans

Last Updated: 4/9/2020 3:50 PM

Fed to Provide Liquidity for PPP Loans

The Federal Reserve on Thursday took additional actions to provide up to $2.3 trillion in loans to support the economy. This funding will assist households and employers of all sizes and bolster the ability of state and local governments to deliver critical services during the coronavirus pandemic. The Federal Reserve's role is guided by its mandate from Congress to promote maximum employment and stable prices, along with its responsibilities to promote the stability of the financial system.

The actions by the Fed, among other things will bolster the effectiveness of the Small Business Administration's Paycheck Protection Program by supplying liquidity to participating financial institutions through term financing backed by PPP loans to small businesses. The PPP provides loans to small businesses so that they can keep their workers on the payroll. The Paycheck Protection Program Liquidity Facility will extend credit to eligible financial institutions that originate PPP loans, taking the loans as collateral at face value. Download the term sheet for the Paycheck Protection Program Liquidity Facility. Learn more about what the Fed’s actions will accomplish.

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