Fed Expands Paycheck Protection Facility to Add More Lenders
The program helps U.S. provide stimulus loans to small businesses and is designed to keep workers on payrolls
(Bloomberg) -- The Federal Reserve on Thursday said it’s expanding a program that helps the government provide stimulus loans to small businesses and is designed to keep workers on payrolls during the coronavirus pandemic.
The Fed said in a statement that it broadened access to its Paycheck Protection Program Liquidity Facility to additional lenders such as non-depository institutions. The central bank also widened the collateral that can be pledged.
The Small Business Administration on Monday relaunched its Paycheck Protection Program, which was intended for small businesses to get loans of up to $10 million that convert to grants if a company uses the proceeds to keep workers employed. The PPP is doling out an additional $320 billion approved by Congress, after an initial round of $349 billion was exhausted on April 16 after just 13 days.
The Trump administration Thursday limited to $20 million the value of loans that corporate groups can get from the program after outrage over reports that large companies and brand-name chains got funds. It also laid out criteria allowing non-bank lenders to handle loans “to ensure broad and diverse lender participation.”
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