This week we have continued to unpack the stimulus bill, along with assessing the impact of COVID-19 on our industry. Below are several guides and our most recent webinars to help you take advantage of this package, understand the different opportunities, and hear about how our industry is innovating and adapting to the new normal.
The CARES Act passed by Congress is less a stimulus package than it is an unprecedented bridge loan. If this feels like a bumpy ride, it is, but we are navigating this crisis together.
The new loan program at the Small Business Administration (SBA) is the first program that we are continuing to evaluate as changes are happening daily. The Payroll Protection Program (PPP) did not even exist seven days ago. Last year the SBA’s 7(a) program lent out $23 billion, yet now they are trying to push $350 billion through a similar infrastructure with new rules in a matter of weeks. To date, AALU/GAMA’s work has focused mostly on the borrower side of the equation. Of course, there is an entire process and set of rules that must unfold for the lenders as well. That side of the coin is what you are seeing reflected in the news this morning.
Three critical things that AALU/GAMA recommend you keep in mind:
The CARES Act provides over $500 billion in loans, loan guarantees, and other economic support for airlines and other eligible businesses adversely impacted by the coronavirus pandemic. However, businesses receiving support under this program must limit compensation and severance for employees with 2019 total compensation over $425,000—including restrictions on using the program to enhance senior executive compensation.
There are a number of key terms in these provisions that are undefined, including “total compensation.” This Q&A provides the details of the executive compensation provisions to date. Our counsel at Troutman Sanders will be providing a WR Marketplace analysis on the full impacts of these provisions as Treasury soon issues clarifying guidance.
© 2020 AALU. All Rights Reserved