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The Paycheck Protection Program Liquidity Facility (PPPLF)

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Abstract

On April 9, 2020, the Federal Reserve announced that it would take additional actions to provide up to $2.3 trillion in loans to support the economy in response to the COVID-19 crisis. Among the measures taken was the establishment of a new facility intended to facilitate lending to small businesses via the Small Business Administration's Paycheck Protection Program (PPP). Under the Paycheck Protection Program Liquidity Facility (PPPLF), Federal Reserve Banks are authorized to supply liquidity to financial institutions participating in the PPP in the form of term financing on a non-recourse basis while taking PPP loans as collateral. The facility was launched April 16, 2020. As of May 7, it had issued over $29 billion in loans (see the H.4.1 Statistical Release). This post lays out the background for the PPPLF and discusses its intended effects.

Suggested Citation

  • Haoyang Liu & Desi Volker, 2020. "The Paycheck Protection Program Liquidity Facility (PPPLF)," Liberty Street Economics 20200520, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:88022
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    Cited by:

    1. Rachel Atkins & Lisa Cook & Robert Seamans, 2022. "Discrimination in lending? Evidence from the Paycheck Protection Program," Small Business Economics, Springer, vol. 58(2), pages 843-865, February.
    2. Desi Volker, 2021. "COVID Response: The Paycheck Protection Program Liquidity Facility," Staff Reports 978, Federal Reserve Bank of New York.

    More about this item

    Keywords

    Paycheck Protection Program; Paycheck Protection Program Liquidity Facility; COVID-19; Federal Reserve facilities; CARES Act;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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