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The Federal Reserve’s COVID-19 Economic Relief Programs

The Federal Reserve recently created, proposed and expanded several programs to relieve the economic impact of COVID-19 by providing liquidity to support credit markets.  In general, the programs extend credit through special purpose vehicles capitalized with equity from the Department of the Treasury and debt from the Federal Reserve.  Some programs provide credit to financial institutions to increase their lending capability, while others provide credit directly to businesses and municipalities.  With the exception of the Commercial Paper Funding Facility, these programs will extend credit or make purchases until September 30, 2020, unless extended.

We expect publication of additional guidance on these programs as they are implemented.  Businesses that believe they may be eligible for a loan supported by the Main Street Business Lending Program should consider inquiring with their lenders and banks now as to whether they will participate in the program.

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