Fed launches $2.3T loan program to support Main Street

'Our actions today will help ensure that the eventual recovery is as vigorous as possible'

The Federal Reserve will provide up to $2.3 trillion of loans to further support the economy, the central bank said Thursday.

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The so-called Main Street Lending Program will provide support to households and businesses of all sizes and help governments deliver critical services to combat disruptions caused by the COVID-19 pandemic.

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“Our country's highest priority must be to address this public health crisis, providing care for the ill and limiting the further spread of the virus," Federal Reserve Chairman Jerome Powell said in a statement. "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."

The new facility will supply liquidity for the Small Business Administration's Paycheck Protection Progam, which provides loans to small businesses to allow them to keep their workers on the payroll.

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The program will also assist with the flow of credit to small- and mid-sized businesses by purchasing up to $600 billion of loans. It will increase the flow of credit to households and companies by expanding facilities to support up to $850 billion in lending as well as provide up to $500 billion of credit to states and municipalities.

Companies employing up to 10,000 workers with revenue of less than $2.5 billion that were in good financial standing before the crisis can receive four-year loans with principal payments and interest that can be deferred up to a year.