On March 25th, the United States Senate approved the ‘Coronavirus Aid, Relief, and Economic Security Act’ (CARES Act), which was approved by the House of Representatives on March 27th and signed into law shortly. The CARES Act includes $2 trillion in stimulus and will implement the federal government’s most substantial response to the economic disruption of the COVID-19 pandemic. Among the relief programs in the CARES Act are (i) a $500 billion financial support program administered by the Department of Treasury (Treasury), (ii) a “paycheck protection program” of loans to businesses through the Small Business Administration (SBA), (iii) $58 billion of specific loan programs and grant programs for air carriers and related industries and (iv) over $127 billion allocated to the Department of Health and Human Services for a variety of purposes.
Below are summaries of the main stimulus provisions of the CARES Act of interest to corporations, financial institutions and private equity investors. Many provisions of the CARES Act will need to be finalized through regulation or will be administered at the discretion of a governmental agency. King & Spalding will continue to monitor implementation of the CARES Act across the various programs.
- Federal Reserve Emergency Relief Measures
- Expansion of SBA 7(a) Loans / Restaurant Industry Support
- General $500 Billion Loans for U.S. Business
- Air Carriers and Aviation Industry
- Businesses Critical to Maintaining National Security
- Energy Provisions
- Employee Benefits and Executive Compensation
- Tax Provisions