Federal Reserve Plans to Form a New Facility to Facilitate Lending to Small Businesses via SBA PPP
Posted on 04/07/2020
The Federal Reserve plans to reveal a new facility to facilitate lending to small businesses via the U.S. Small Business Administration’s Paycheck Protection Program (PPP) by providing term financing backed by PPP loans. The Federal Reserve wants to backstop a new government effort to encourage financial institutions to lend to small businesses.
US$ 350 billion of the US$ 2 trillion coronavirus support package is geared for small business loans that can be forgiven if the borrower retains its workers, not lower wages, and use the funds for the described purposes among other rules. Companies with 500 or fewer employees can apply for the PPP on a first-come, first-serve basis.
Keywords: Federal Reserve System.
