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Is the PPPLF Still Encouraging Small Business Lending?

Author

Listed:
  • Lora Dufresne
  • Mark M. Spiegel

Abstract

The Federal Reserve designed its Paycheck Protection Program Liquidity Facility to ease liquidity issues and support small business lending during the pandemic. The liquidity facility allowed banks to pledge Paycheck Protection Program loans as risk-free collateral during the beginning of the COVID-19 pandemic. Analysis shows that, although the program has essentially ended, the positive effects on small business lending have persisted, particularly among small banks with lower liquidity, in keeping with the intent of the program.

Suggested Citation

  • Lora Dufresne & Mark M. Spiegel, 2026. "Is the PPPLF Still Encouraging Small Business Lending?," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, vol. 2026(04), pages 1-5, February.
    • Handle: RePEc:fip:fedfel:102418
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    References listed on IDEAS

    as
    1. Lopez, Jose A. & Spiegel, Mark M., 2023. "Small business lending under the PPP and PPPLF programs," Journal of Financial Intermediation, Elsevier, vol. 53(C).
    2. Chernenko, Sergey & Scharfstein, David, 2024. "Racial disparities in the Paycheck Protection Program," Journal of Financial Economics, Elsevier, vol. 160(C).
    3. Granja, João & Makridis, Christos & Yannelis, Constantine & Zwick, Eric, 2022. "Did the paycheck protection program hit the target?," Journal of Financial Economics, Elsevier, vol. 145(3), pages 725-761.
    4. Anbil, Sriya & Carlson, Mark & Styczynski, Mary-Frances, 2023. "The effect of the Federal Reserve’s lending facility on PPP lending by commercial banks," Journal of Financial Intermediation, Elsevier, vol. 55(C).
    Full references (including those not matched with items on IDEAS)

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