Corporate Liquidity Fund Section 4003 CARES Act 2020.03.27pdf
Corporate Liquidity Fund Section 4003 CARES Act 2020.03.27pdf
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  1. Page 1of 2Coronavirus Aid Relief and Economic Security (CARES) ActCorporate Liquidity FundSec. 4003. Emergency Relief and Taxpayer Protections DRAFT SUMMARY–SUBJECT TO REVISIONThe Coronavirus Aid, Relief, and Economic Security (CARES) Act includes animportantprovision aimed at keeping workers employed and businesses and nonprofits with more than 500 employeesafloat.States and municipalities are also eligible1.Provides $500 billion in loans, loan guarantees, and other transactions divided into four categories: 1)$25 billion for passenger airlines; 2)$4 billion for cargo air carriers; 3)$17 billion for businesses critical to maintaining national security; and 4)$454 billion for use in loan or loan guarantees established by the Federal Reserve for eligible businesses as well as states or municipalities. Lending facilities for states and municipalities, as well as the medium-sized business and non-profit lending program, are authorized but not required to be established by the Secretary. How will the mid-sized loans will work:●Treasury shall provide a facility which helps finance banks providing direct loans to eligible businesses including, to the extent practicable, nonprofit organizations, with between 500 and 10,000 employees, capped at 2% annual interest. ●Any eligible borrower applying for a direct loan under this program for small and medium sized businesses and non-profits shall make a good-faith certification that: –They are applying due to economic uncertainty and the need to funded ongoing operations, –Funds will be used to retain at least 90 percent of the recipient’s March 24, 2020 employment levels, at full compensation and benefits, until September 30, 2020,–Intends to restore not less than 90 percent of the workforce as of February 1, 2020, and to restore all compensation and benefits to the workers of the recipient no later than 4 months after the termination date of the March 13, 2020 Stafford Act emergency declaration, –Is created or organized in the U.S. or under the laws of the U.S. and has significant operations in and employees based in the United States; (5) it is not a debtor in a bankruptcy proceeding; 1Separaterules for states and municipalitiesmay be developed
  2. Page 2of 2–It will not provide senior executive bonuses or enhanced compensation during the term of the loan; –Ban on dividends/other capital and stock buybacks, from a national exchange, during the life of the loan, barring preexisting stock repurchase contracts,–It will not outsource or offshore jobs for the term of the loan and 2 years after completing repayment of the loan, –It will not abrogate existing collective bargaining agreements for the term of the loan and 2 years after completing repayment of the loan; and –it will remain neutral in any union organizing effort for the term of the loan. Who is eligible for this program?Businesses and nonprofit organizations with 500 -10,000 employees. What portion of the loan is forgivable?No portion of the loan is forgivable.What information do I need to get started and find a private lender for my loan? In the next 10 days the Department of Treasury must issue guidance about how this program will operate.
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