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Fed encourages participation in SBA and Treasury relief programs
The Federal Reserve Board has issued SR 20-10 to inform supervised financial institutions about several forms of relief available to small businesses affected by COVID-19 as a result of the CARES Act. The Federal Reserve encouraged financial institutions to consider participating in programs administered by the SBA and Treasury. The programs include:
- The Economic Injury Disaster Loan program under Section 7(b) of the Small Business Act, which provides funds to small businesses to cover economic injury resulting from the disaster, such as a loss of revenue; and
- The Paycheck Protection Program, which provides loans to encourage certain qualified small businesses to retain employees through the COVID-19 pandemic and includes loan forgiveness subject to certain conditions
The letter includes links to the SBA and Treasury websites on their COVID-19-related programs. Consistent with Federal Reserve statements on institutions working with borrowers affected by COVID-19, Federal Reserve examiners will not criticize supervised institutions that prudently use these programs. Information on the Federal Reserve’s COVID-19 supervisory and regulatory actions, as well as responses to questions from financial institutions, is available on the Board’s public website, which is updated on a regular basis.