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The Fed’s Paycheck Protection Program Liquidity Facility, explained
The Federal Reserve, whose role is to help stabilize the economy, stepped in and started lending to banks and other lenders so that those lenders, in turn, could lend to small businesses. The aim is to help make it so that businesses that seek loans are more likely to hear yeses, that funds will flow through lenders receiving the Fed loans to those small businesses and the people who work for them.
COVID-19 Is Making the Economy Sick, Too
While healthcare experts focus on the COVID-19 pandemic and work to keep people healthy, The Federal Reserve is working to keep the nation's economy health. Toward that end, in March 2020, The Fed began taking a number of steps to support the economy.
The Fed’s Secondary Market Corporate Credit Facility, explained
The Fed is buying corporate bond-related assets so that investors that want or need to sell them off are better able to do so and get the cash they need.
The Fed’s Primary Market Corporate Credit Facility, explained
The Fed is buying corporate bonds. Companies can use the money they borrow through these bonds for a variety of purposes such as paying down debt and sustaining operations until the economy returns to pre-COVID-19 conditions. When such businesses can sustain operations, they preserve jobs and continue to buy goods and services from other companies.
The Fed’s Term Asset-Backed Securities Loan Facility, explained
The Fed is lending up to $100 billion to lenders so that lenders may bundle and sell loans they’re making (residential mortgages excluded). When the loans are taken off lenders’ hands in this way, the lenders have more money to make more loans to people and businesses in the communities they serve.
The Fed’s Main Street Lending Program, explained
Through its Main Street Lending Program, the Federal Reserve will buy up to $600 billion in loans that lenders, such as banks and credit unions, make to small and midsize businesses and nonprofits. When lenders sell their loans to the Fed, they can use the money they receive to make more loans.
The Fed’s Municipal Liquidity Facility, explained
The Fed is lending up to $500 billion to eligible cities, counties, and states. Eligible borrowers include all 50 states and Washington DC, counties with at least 500,000 residents, and cities with at least 250,000 residents. Nearly 270 cities, counties, and states meet these thresholds. To ensure smaller places may also be supported, potential borrowers also include cities or counties identified by governors in states where less than two cities and counties meet these population thresholds. Additionally, governors may identify two entities in their states that draw revenue through government ...