Efforts are underway at the Federal Reserve to provide more Small Business Administration-qualified lenders access to a Federal Reserve facility created to support the SBA’s Paycheck Protection Program “as soon as possible,” the Fed said Thursday.
It said more details will be released shortly.
Lenders qualified to participate in the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) include depository institutions, such as banks and credit unions, as well as non-depository institution lenders, such as some community development financial institutions (CDFIs), the Fed noted. However, it said only only depository institutions are currently eligible to participate in the Fed’s Paycheck Protection Program Liquidity Facility (PPPLF). It said more than 1,000 institutions have already been approved to access the program.
The SBA’s PPP, created by the recently enacted Coronavirus Aid, Relief, and Economic Security Act (CARES Act), guarantees loans from qualified lenders to small businesses so that they can keep workers employed. The PPPLF supports the PPP by extending credit to financial institutions that make PPP loans, using the loans as collateral.