Small business lending

• Allocates $377 billion in funding for the Small Business Administration (SBA) Section 7(a) Loan Program. More generous eligibility and terms.

o Increases government guarantee of the 7(a) loan program to 100% through December 31, 2020 o Defines eligibility for loans as a small business with not more than 500 employees
o Includes sole-proprietors, independent contractors, and other self-employed individuals
o Establishes the maximum 7(a) loan amount to $10 million
o Specifies allowable uses of the loan include payroll support, such as employee salaries, paid sick or medical leave, insurance premiums, and mortgage, rent, and utility payments
o For eligibility purposes, requires lenders to determine whether a business was operational on February 15, 2020, and had employees for whom it paid salaries and payroll taxes
o Waives borrower and lender fees, collateral and personal guarantee requirements
o Stipulates that maximum interest rates for SBA 7(a) program loans is 4%
o Allows complete deferment of 7(a) loan payments for 6 to 12 months and allocates up to $17 billion in subsidies to cover principal, interest, and fees for a six-month period
o Borrower shall be eligible for loan forgiveness on payroll costs, mortgage interest payments
o Allocates $10 billion in funding for SBA’s Emergency Economic Injury Disaster Loans (EIDL)

Distressed industry support

• Provides $500 billion to Treasury’s Exchange Stabilization Fund (ESF) to provide loans, loan guarantees, and other investments, distributed as follows…
o $25 billion for passenger air carriers
o $4 billion for cargo air carriers
o $17 billion for businesses important to maintaining national security

• All
o Alternative financing is not reasonably available to the business
o The loan is sufficiently secured, not less than market interest rate pre-outbreak
o The duration of the loan must be as short as possible and cannot exceed 5 years
o No stock buybacks, or dividends through the duration of the loan plus one year
o Borrowers must, until September 30, 2020, maintain its employment levels as of March 24, 2020, to the extent practicable, and retain no less than 90% of its employees as of that date
o Borrowers certify that it is U.S.-domiciled business, employees are predominantly in the U.S.
o The loan cannot be forgiven
o Treasury must receive warrants or equity interests in eligible businesses or senior debt instruments

Treasury-based direct lending must meet the following criteria…

• Provides $454 billion for direct lending, loan guarantees, and investments in support of the Federal Reserve’s 13(3) lending facilities to eligible businesses, states, and municipalities
o Any lending through a 13(3) facility established by the Federal Reserve must be broad-based, with verification participants are solvent and unable to obtain adequate financing elsewhere
o No stock buybacks, or dividends through the duration of the loan plus one year
o Prohibits recipients of any direct lending or Federal Reserve facility recipients from increasing the compensation of any officer or employee whose total compensation exceeds $425,000
o Treasury is tasked with implementing a special 13(3) facility through the Federal Reserve targeted specifically at nonprofit organizations and businesses between 500 and 10,000 employees
o The funds received must be used to retain at least 90% of the recipient’s workforce, with full compensation and benefits, through September 30, 2020
o Recipient will not outsource/offshore jobs for the term of the loan plus an additional two years
o Recipient will not abrogate existing collective bargaining agreements for the term of the loan plus an additional two years
o The recipient must remain neutral in any union organizing effort for the term of the loan

  • Authorizes the FDIC to temporarily establish a debt guarantee program to guarantee debt of solvent insured depositories and depository institution holding companies
  • Establishes the Office of the Special Inspector General for Pandemic Recovery to audit and investigate loans, loan guarantees, and other investments made by the Treasury Secretary
  • Prohibits any company in which the President, Vice President, an executive department head, Member of Congress or family member to own over 20% of stock from being eligible
  • Establishes a Congressional Oversight Commission charged with oversight these programs
  • Provides grant for employee wages and benefits in the amounts of up to $25 billion for passenger air carriers, up to $4 billion for cargo air carriers, and up to $3 billion for airline contractors
  • Provides for Secretary of Treasury to receive warrants, options, stock and other financial instruments to provide appropriate compensation for the government for the assistance
  • Temporarily repeals federal excise taxes collected in relation to commercial aviation, specifically those applied to the transportation of persons, the transportation of property, and aviation fuel

Business taxes

  • Provides a refundable payroll tax credit for 50% of wages paid by employers to employees during the COVID-19 crisis (up to first $10,000 of compensation per employee)
  • Allows employers, self-employed to defer payment of the employer share of the Social Security tax
  • Relaxes the limitations on a company’s use of net operating losses (NOL) arising in a tax year beginning in 2018, 2019, 2020
  • Temporarily increases the amount of interest expense businesses allowed to deduct by increasing the 30% limitation to 50% of taxable income (with adjustments) for 2019 and 2020
  • Enables businesses to write off immediately costs associated with improving facilities instead of having to depreciate those improvements over the 39-year life of the building Individuals
  • Unemployment insurance
    o Creates a temporary Pandemic Unemployment Assistance program through December 31, 2020 for those not traditionally eligible for unemployment benefits (self-employed, independent contractors, others) who are unable to work as result of coronavirus public health emergency
    o Provides an additional $600 per week payment to each recipient of unemployment insurance or Pandemic Unemployment Assistance for up to four month
    o Provides an additional 13 weeks of unemployment benefits through December 31, 2020
    o Provides funding to support “short-time compensation” programs (employers reduce employee hours instead of laying off workers, employees receive a pro-rated unemployment benefit)
  • All U.S. residents with adjusted gross income up to $75,000 ($150,000 married) are eligible for the full $1,200 ($2,400 married) rebate plus an additional $500 per child
  • Special Rules Related to Retirement Funds

o Waives the 10% early withdrawal penalty for distributions up to $100,000 from qualified retirement accounts for coronavirus-related purposes made on or after January 1, 2020
o Waives the minimum distribution rules for defined contribution plans and IRAs for 2020


  • Removes various regulatory barriers to the use of telemedicine
  • Temporarily lifts the Medicare sequester, which reduces payments to providers by 2%, from May 1 through December 31, 2020
  • Increases the payment that would otherwise be made to a hospital for treating a patient admitted with COVID-19 by 20%
  • Extends funding for various health plans through November 30, 2020, including delay of disproportionate share hospital (DSH) reductions, community health centers (CHCs)
  • Government spending… hospitals/providers – $100 billion, healthcare preparedness – $32 billion Financials/mortgages
  • Requires the federal banking agencies by interim final rule to temporarily reduce the Community Bank Leverage Ratio for qualifying community banks from 9% to 8%
  • A financial institution may elect to suspend any determination under U.S. GAAP of a loan modified as a result of the effects of the coronavirus as being a troubled debt restructuring
  • An insured depository institution (including credit unions), bank holding company, or any affiliates has the option to temporarily delay implementation of CECL methodology
  • Prohibits foreclosures on all federally-backed mortgage loans for a 60-day period beginning on March 18, 2020 and permits borrowers to request forbearance for up to 180 days
  • Permits borrowers with a federally-backed multifamily mortgage loan who have experienced a financial hardship due to the coronavirus to request forbearance
  • Prohibits landlords from initiating legal action to recover possession of a rental unit or to penalties for 120 days for properties with federally insured/guaranteed mortgages
  • Requires deferment of student loan payments, principal, and interest for 6 months, through September 30, 2020, without penalty to the borrower for all federally owned loans


  • Limits employer costs for paid leave to no more than $200/day, $10,000 in aggregate per employee
  • Limits employer costs for sick leave to no more than $511/day, $5,110 in the aggregate or more than $200/day, $2,000 in the aggregate to care for a quarantined individual or child for each employee)
  • Allows an employee who was laid off by an employer March 1, 2020, or later to have access to paid family and medical leave in certain instances if they are rehired by the employer
  • Allows employers to receive an advance tax credit from Treasury instead of having to be reimbursed on the back end

Other government spending

• Increase government spending on programs in following areas… o Health care (see prior section)… $132 billion
o States/localities – $150 billion
o Education – $31 billion
o Transit – $25 billion
o Food and nutrition service – $25 billion