Appropriation

$349B

$500B

Eligibility

Available to small business concerns and any other business concern with no more than 500 employees (or, with respect to accommodation and food service businesses, 500 employees per physical location)

Affiliation rules are disregarded for (i) any accommodation or food service business concern with less than 500 employees, (ii) any business concern that is a franchise, and (iii) any business concern that receives financial assistance from an SBIC fund

Available to any employer whose operations were fully or partially suspended during the calendar quarter due to orders from an appropriate governmental authority due to COVID-19 or who had gross receipts for such calendar quarter less that are less than 50% of gross receipts for the same quarter a year prior (phases out when receipts go back above 80%)

For employers with more than 100 employees, only applies to wages paid with respect to employees not providing services due to COVID-19

An eligible business would be an air carrier or a United States business that has suffered a covered loss and not otherwise received adequate economic relief in the form of loans or guarantees provided under the Cares Act.

(b)(1) $25B allocated to passenger air carriers,
(b)(2) $4B allocated to cargo air carriers,
(b)(3) $17B allocated to business critical to national security,
(b)(4) $454B allocated to provide liquidity to other eligible business

Provider of Funds

Existing 7(a) SBA lenders and additional lenders determined by the Administrator to have the necessary qualifications to process, close, disburse and service loans made with the guarantee of the Administration

Loans are 100% guaranteed by the SBA

Paid as a reduction to applicable employment taxes for such calendar quarter, with amounts in excess of any such taxes treated as an overpayment and refunded

Secretary shall make loans and loan guarantees to, and other investments in, programs or other facilities established by the Board of Governors

Secretary shall endeavor to implement a program that provides financing to banks and other lenders that make direct loans to eligible businesses with between 500 and 10,000 employees with such direct loans being subject to an annualized interest rate that is not higher than 2% per annum (for fewer than 500, see the Paycheck Protection Program)

Maximum Amount

The lesser of (i) (a) average monthly payments for payroll costs (x) for the TTM period before the date the loan is made, (y) with respect to seasonal businesses, for the 12 week period beginning 2/15/19, or (z) with respect to new businesses, for the period from 1/1/20-2/29/20 multiplied by (b) 2.5 and (ii) $10,000,000

50% of qualified wages with respect to each employee for such calendar quarter (lifetime cap of $10,000 of wages per employee)

Limited to wages paid after 3/12/20 and before 1/1/21

Not specified

Interest and Fees

Interest is capped at 4%

No fees, but SBA will reimburse Lenders for processing expenses in an amount equal to 5% of loans of not more than $350K, 3% of loans of more than $350K but less than $2M and 1% of loans of not less than $2M

N/A

Market rate (determined before the impact of COVID-19) for a transaction of similar risk.

Secretary to receive, in its discretion, a warrant or equity interest in the eligible business or a senior debt instrument issued by such eligible business described in subsections (b)(1), (b)(2) and (b)(3)

Use of Proceeds

Payroll costs; costs related to the continuation of group health care benefits, employee salaries; payments of interest on mortgage obligations; rent; utilities; and interest on any other debt incurred before the covered period

Unrestricted

Not specified, but must retain at least 90% of the workforce at full compensation and benefits through 9/30/2020

Repayment

Lenders must provide complete payment deferment for impacted borrowers for at least 6 months (and not more than 1 year)

Loans are forgiven in an amount equal to all Payroll costs, payments of interest on any covered mortgage, payments on any covered rent obligation, and any covered utility payment. Upon forgiveness, the Administrator will remit to the lender within 90 days the amount of such forgiveness plus any interest accrued through the date of payment. Forgiveness does not result in CODI for the business.

Loan forgiveness is reduced by a percentage equal to any employee reductions during the covered period or salary reductions of greater than 25% (with an exception for employees re-hired by 6/30/20)

N/A

Any direct loan pursuant to subsection (b)(4) shall not require P&I payments for the first 6 months

Duration of loan to be as short as practicable but not longer than 5 years

Loans may not be forgiven

Collateral

None required; no personal guarantees

N/A

Loans described in subsections (b)(1), (b)(2) and (b)(3) to be sufficiently secured or priced to take into account such risk

No specific mention of whether the loans may
be priming

Borrower certification

Eligible recipient must make a good faith certification that:

(a) Loan support is necessary to support ongoing operations because of current conditions;

(b)Funds will be used to retain workers and maintain payroll or make mortgage payments, lease payments, and utility payments;

(c)Recipient does not have an application pending for a loan under this subsection for the same purpose and duplicative of amounts applied for or received under a covered loan; and

(d)During the period beginning on February 15, 2020 and ending on December 31, 2020, that the recipient has not received amounts under this subsection for the same purpose and duplicative of amounts applied for or received under a covered loan

N/A

Eligible recipient must make a good faith certification that:

(a) Loan support is necessary to support ongoing operations because of current conditions;

(b) Funds will be used to retain at least 90% of workforce, at full compensation and benefits, until 9/30/20;

(c) Recipient intends to restore not less than 90% of workforce that existed before 2/1/20, and to restore all compensation and benefits to workers no later than 4 months after HSS declares COVID-19 emergency is over;

(d) Recipient is US entity with significant US operations;

(e) Recipient is not in bankruptcy;

(f) Recipient will not pay dividends or make redemptions while loan is outstanding, except as required by contract as in effect on the date of the enactment of the Act;

(g) Recipient will not outsource or offshore jobs for 2 years after loan repaid; and

(h) Recipient will remain neutral in any union organizing effort during term of loan

Other

No requirement that the business concern be unable to obtain credit elsewhere

Does not apply to employers that have received a loan through the Paycheck Protection Program

Credit must not be reasonably available at the time of the transaction

Limitations on recipient’s executive
compensation during the term of the loan and 1
year thereafter including: (1) no permitted
increases in compensation for employees with
total compensation exceeding $425k in 2019
with a 2x compensation limit on severance and
(2) compensation capped at the sum of $3m
and 50% of 2019 total compensation in excess
of $3m. “Total compensation” includes salary,
bonuses, awards of stock, and any other
financial benefits.

Secretary of Transportation may require any air carrier receiving loans to maintain scheduled air service

Timing for Regulations

15 days

N/A

10 days