The Federal Government continues to pull out all the stops in an effort to restore and restart our economy. This morning, as Congress debated another of its own financial aid packages, Federal Reserve Chair Jerome Powell announced a new $2.3 trillion round of loans, most of which is designed to support small businesses and consumers.
Powell commented that, "The Fed's role is to provide as much relief and stability as we can during this period of constrained economic activity, and our actions today will help ensure that the eventual recovery is as vigorous as possible."
Importantly to small business owners, the Fed committed to supplying financing to banks taking part in the Small Business Administration's Paycheck Protection Program (PPP). The Paycheck Protection Program Liquidity Facility will extend credit to banks that originate PPP loans, taking the loans as collateral at face value, according to reports.
The Fed will add to its Main Street Lending Program for small businesses with $600 billion in loans. The package also includes expanding three other loan facilities already set up for consumers and businesses—the Primary and Secondary Market Corporate Credit Facilities and the Term Asset-Backed Securities Loan Facility—with $850 billion more in credit backed by $85 billion in credit protection from the Treasury Department.
HBK is monitoring these programs and will continue to provide updates as they evolve. We remain available to answer your questions and concerns and help you take advantage of these opportunities to support your business through the COVID-19 crisis and recover from the economic impact of the virus as quickly and effectively as possible.