Federal Reserve to smooth lending to small businesses

FILE PHOTO: The Federal Reserve Board building on Constitution Avenue is pictured in Washington, U.S., March 27, 2019. REUTERS/Brendan McDermid

WASHINGTON (AP) — The Federal Reserve will provide support to the government’s new small business lending program in its latest attempt to smooth the flow of credit in the virus-stricken U.S. economy.

The Fed said Monday that it will allow banks to borrow from the Fed by using loans from the government’s small business facility as collateral. That could encourage banks to lend more to small companies.

The Fed’s two-sentence announcement said that further details will be provided this week.

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