Number of Employees Type of Assistance Amount; Basic terms Other Notable Features
“Small business” under SBA definition, based on NAICS codes Expanded SBA section 7(b) loan guarantees Up to $2 million; Up to 30 years; interest rate capped at 3.75%.
Up to 500 (subject to SBA affiliation rules; exceptions for hotels, food services) New SBA section 7(a) loan guarantees 2.5 times the average monthly payroll costs, up to $10 million; may be used for payroll support and benefits; fees waived. Loan forgiveness up to amounts equal to 8 weeks of payroll costs, mortgage interest, rent, and utilities.
500 to 10,000 New Federal Reserve Mid-Size Business Assistance (direct loans from lenders financed by the Fed) Interest rate no higher than 2%; no principal or interest for first 6 months. Retain at least 90% of workforce; U.S. company; no dividends or stock buybacks; no outsourcing or offshoring; maintain union agreements; executive compensation limits.
Small and Mid-Size Businesses (presumably up to 10,000 employees) Main Street Lending Program (direct loans from lenders financed by the Fed) To be implemented by the Fed. Unknown. There may be Federal Reserve action soon on this.
Applies to all U.S. companies that own eligible collateral and maintain an account with a primary dealer Federal Reserve Term Asset-Backed Securities Loan Facility (TALF) Loans secured by eligible consumer and small business asset-backed securities, such as student loans, auto and credit card loans, loans guaranteed by the SBA, and certain other assets. Presume no dividends or stock buybacks; U.S. company; executive compensation limits; awaiting final regulations from the Federal Reserve.

Applies to all U.S. companies rated at least BBB-/Baa3

 

Federal Reserve Primary Market Corporate Credit Facility (PMCCF) Loan and bond financing to U.S. companies with investment grade debt ratings; maturity of 4 years or less. Presume no dividends or stock buybacks; U.S. company; executive compensation limits; awaiting final regulations from the Federal Reserve.

Applies to all U.S. companies rated at least BBB-/Baa3

 

Federal Reserve Secondary Market Corporate Credit Facility (SMCCF) Purchase in the secondary market bonds issued by U.S. companies with investment-grade debt ratings; limited to 10% of all bonds outstanding. Presume no dividends or stock buybacks; U.S. company; executive compensation limits; awaiting final regulations from the Federal Reserve.

** NOTE: Separate Treasury lending programs have been set up for airlines and “businesses critical to maintaining national security.”

For more detail on small business loan programs, please see the GT Alert “Congress Passes CARES Act: Overview of the Relief Available to Small and Other Business Concerns.”

For more details on programs available through federal financial regulatory agencies to businesses of all sizes, please see the GT Alert “COVID-19 Federal Legislative and Regulatory Economic Stabilization Programs – What Your Business Needs to Know.”

For more information and updates on the developing situation, visit GT’s Health Emergency Preparedness Task Force: Coronavirus Disease 2019 or GT’s Economic Stimulus Team.

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Photo of Robert Mangas Robert Mangas

Rob Mangas is Co-Managing Shareholder of the Washington, D.C. office and Co-Chair of the firm’s Washington, D.C. Federal Government Law & Policy Practice. Rob focuses his practice on advocacy before the U.S. Congress and federal agencies. He represents clients in a variety of…

Rob Mangas is Co-Managing Shareholder of the Washington, D.C. office and Co-Chair of the firm’s Washington, D.C. Federal Government Law & Policy Practice. Rob focuses his practice on advocacy before the U.S. Congress and federal agencies. He represents clients in a variety of different industry sectors, and is experienced in navigating U.S. House and Senate Rules and in legislative drafting.

Photo of Lee Ann Anderson Lee Ann Anderson

Lee Ann Anderson focuses her practice on capital markets, structured finance and corporate transactions, with broad experience in U.S. and cross-border securities offerings. In the current global crisis, Lee Ann serves as a member of our COVID-19 Economic Stimulus Response Team and has…

Lee Ann Anderson focuses her practice on capital markets, structured finance and corporate transactions, with broad experience in U.S. and cross-border securities offerings. In the current global crisis, Lee Ann serves as a member of our COVID-19 Economic Stimulus Response Team and has counseled scores of companies about relief under Titles I and IV of the CARES Act and relief programs established by the Federal Reserve.

Lee Ann counsels issuers and investment banks on certificates of deposits, including rates-, commodities-, equity-, and proprietary index-linked products. She has wide-ranging experience in debt and equity capital markets, securitizations, and other structured finance transactions. Her practice has included scores of domestic and international debt and equity offerings, as well as securitizations of receivables and other collateral, complex tax-based structures utilizing swaps and other derivatives. Lee Ann also has advised a number of foreign and domestic public companies with respect to a wide range of corporate and securities matters, including reporting obligations.

Additionally, Lee Ann has deep experience counseling clients on corporate transactions, including mergers, stock purchases, asset sales, joint ventures, and other reorganization transactions. She also provides a range of general corporate and governance advice. Lee Ann has a strong commitment to pro bono work and served as a pro bono coordinator at her previous firm.