Federal Reserve Board - Federal Reserve expands access to its Paycheck Protection Program Liquidity Facility (PPPLF) to additional lenders, and expands the collateral that can be pledged
Summary
Press release of the Board of Governors of the Federal Reserve System dated April 30, 2020 announcing that the Federal Reserve expanded access to its Paycheck Protection Program Liquidity Facility (PPPLF) to additional lenders and expanded the collateral that can be pledged. It states that all PPP lenders approved by the SBA, including non-depository institution lenders, are now eligible to participate in the PPPLF. Eligible borrowers will be able to pledge whole PPP loans that they have purchased as collateral, with SBA documentation showing they are the beneficiary of the guarantee. It states that the PPPLF extends credit to financial institutions that make or purchase PPP loans, using the loans as collateral.
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“Federal Reserve Board - Federal Reserve expands access to its Paycheck Protection Program Liquidity Facility (PPPLF) to additional lenders, and expands the collateral that can be pledged.”
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Board of Governors of the Federal Reserve System Press Release April 30, 2020 Federal Reserve expands access to its Paycheck Protection Program Liquidity Facility (PPPLF) to additional lenders, and expands the collateral that can be pledged For release at 5:15 p.m. EDT The Federal Reserve on Thursday expanded access to its Paycheck Protection Program Liquidity Facility (PPPLF) to additional lenders, and expanded the collateral that can be pledged. The changes will facilitate lending to small businesses via the Small Business Administration's (SBA) Paycheck Protection Program (PPP). As a result of the changes, all PPP lenders approved by the SBA, including non-depository institution lenders, are now eligible to participate in the PPPLF. SBA-qualified PPP lenders include banks, credit unions, Community Development Financial Institutions, members of the Farm Credit System, small business lending companies licensed by the SBA, and some financial technology firms. When the PPPLF was announced, the Federal Reserve said the facility would immediately lend to depository institutions and that non-depository institutions would be added as soon as possible. Additionally, eligible borrowers will be able to pledge whole PPP loans that they have purchased as collateral to the PPPLF. An institution that pledges a purchased PPP loan will need to provide the Reserve Bank with documentation from the SBA demonstrating that the pledging institution is the beneficiary of the SBA guarantee for the loan. The SBA's PPP guarantees loans from qualified lenders to small businesses so that those businesses can keep workers employed. The PPPLF supports the PPP by extending credit to financial institutions that make or purchase PPP loans, using the loans as collateral. The additional liquidity from the PPPLF increases the capacity of financial institutions to make additional PPP loans. Further details on the PPPLF are available here . For media inquiries, call 202-452-2955 Last Update: July 28, 2020
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