With the CARES Act in place, we see more detail on the many impactful strategies currently available to positively counter the unprecedented personal and economic challenges we all now face. Title IV covers a wide range of aid options, including a halt on eviction filings, consumer credit protection clauses, a foreclosure moratorium on Federally-backed mortgage loans, and more. It addresses assistance for air carrier workers and also establishes a Congressional Oversight Committee and the new Special Inspector General for Pandemic Recovery. From a business perspective, this section supports lending to eligible businesses, states, and municipalities with funding of approximately $454 billion.

Title IV is the section initially identified as Division C of the Senate bill. Some key points of the loans and loan guarantees available under this section include:

  • Definition of “Eligible business” for purposes of this section is an air carrier or a business that has NOT otherwise received adequate economic relief in the form of loans or loan guarantees provided under this act.
  • The loans and loan guarantees would bear interest at a rate based on risk and current market yield determined by the Secretary of the Treasury.
  • Loans must be sufficiently secured, and the term must not exceed five years.
  • Participants must agree to certain restrictions in employee compensation, dividend issuance, and purchase of affiliate stock
  • The Specific Assistance for Mid-Sized Businesses subsection facilitates loans to businesses with 500-10,000 employees with a maximum interest rate of 2% and six-month deferral on payments of principal and interest

No later than 10 days after March 27, 2020, the Secretary will publish procedures for application and minimum requirements. More details will become available as the Treasury Department publishes these procedures.

Next Steps

Do you have a plan to meet the evolving challenges your business faces in this uncertain time? Do you feel comfortable understanding the process, assimilating the information, and walking through the steps to obtain relief?

With our extensive experience, Carr, Riggs & Ingram can work with you to help you navigate this federal loan and loan guarantee program of the Coronavirus Economic Stabilization Act. We are entrepreneurs like you, and we have been closely involved with processes such as this before. We were there when our clients needed us during the Deepwater Horizon (BP) Oil Spill of 2010.

Contact your CRI representative to guide you through the process, help you gather the information you need, and accompany you as we overcome the COVID-19 pandemic together.