Patrick McHenryChairman

Washington, April 16, 2020 -

The Federal Reserve’s Paycheck Protection Program Liquidity Facility (PPPLF) is now up and running. The PPPLF will ensure lenders can continue to support small businesses and provide much-needed credit to keep Americans employed and businesses open. But the PPPLF is not a fix for the PPP funding that is expected to run out today. If Congressional Democrats continue to block efforts to replenish the program, PPP loans supporting millions of workers will be cut off.

What is the Paycheck Protection Program Liquidity Facility?

• The PPPLF is a lending facility established by the Fed to strengthen the effectiveness of the Small Business Administration's Paycheck Protection Program. This lending facility is a necessary backstop to allow PPP lenders to continue providing much needed liquidity to America’s small businesses through the PPP.
• Under the PPPLF, the Federal Reserve will supply liquidity to participating financial institutions through term financing backed by PPP loans.

Who is eligible to borrow from the facility?

• All depository institutions that are PPP lenders and the Fed is working to expand eligibility to PPP lenders that are not depository institutions in the near future.

What are the terms of borrowing?

• Rate: fixed 35 bps.
• No fees charged.
• Maturity date of the credit extension from the facility will equal PPP loan maturity date.
• No prepayment penalty.
• Eligible collateral is PPP loans that are guaranteed by the SBA, valued at the principal amount.
• Extensions of credit are made without recourse to the borrower.
• There is no limit to the amount of credit that can be extended to eligible depository institutions; an individual depository institution will be allowed to borrow up to the principal amount of PPP loan collateral that it can pledge to the Federal Reserve.

Where can I find more information?

• The term sheet and FAQ document are available on the Federal Reserve’s website, here.

Visit Financial Services Committee Republicans’ website for additional resources and updates on efforts to mitigate the economic impact of coronavirus on consumers.