Executive Summary of Federal Relief Available to Businesses of All Sizes

Updated June 30 to reflect the passage of the Paycheck Protection Program Flexibility Act of 2020, which was signed into law on June 5, as well as the Federal Reserve updates to the Main Street Lending Program on June 15.

The federal government has passed several stimulus packages to mitigate the deep impact of the coronavirus on U.S. businesses and the economy. So far, there have been loan programs and four emergency relief packages, and as of this writing, House Democrats passed a fifth package, which will likely meet opposition in the Senate. Federal relief to date includes:

  • The $8.3 billion Coronavirus Preparedness and Response Supplemental Appropriations Act, passed on March 6
  • The Families First Coronavirus Response Act (FFCRA), passed on March 14
  • The $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed on March 27
  • The Main Street lending program, established by the Federal Reserve on April 9 with funds allocated to it by the CARES Act
  • The $484 billion Paycheck Protection Program (PPP) and Health Care Enhancement Act, passed on April 23

Here are resources available to U.S. businesses by size:


Small businesses – up to 500 employees

Small businesses can avail themselves of both the FFCRA and the CARES Act.

FFCRA: The FFCRA requires businesses and tax-exempt organizations with fewer than 500 employees to provide employees with emergency paid sick or expanded family and medical leave through Dec. 31, 2020. These businesses can then claim a refundable federal tax credit to recover 100% of those payments. For businesses wondering how to determine whether they have 500 or fewer employees, read our guide here.

Employers can deduct the cost of providing such leave from their total federal tax deposit amount from all employees, not just from those who take the leave. The cost of providing such leave can be deducted from: (1) federal income taxes withheld from all employees’ pay; (2) the employees’ share of Social Security and Medicare taxes; and (3) the employer’s share of Social Security and Medicare taxes.

For those who are self-employed, there are equivalent tax credits available for paid sick and child care leave. These taxpayers may deduct tax credits from their estimated tax payments or claim a refund on their 2020 federal income tax return.

CARES Act: The $2 trillion CARES Act, which passed the Senate on March 27, is the largest economic stimulus bill in U.S. history and offers a slew of benefits that for small businesses are administered through the Small Business Administration (SBA). As some of these initial funds were exhausted within a matter of days, the below also accounts for the round of funds in the $484 billion Paycheck Protection Program and Health Care Enhancement Act. Benefits to small businesses include:

  • The Paycheck Protection Program (PPP)—originally $340 billion, this forgivable loan program was depleted after two weeks but was replenished in late April with an additional $310 billion. On June 5, President Trump signed the Paycheck Protection Program Flexibility Act of 2020 for small businesses that have received loans through the Paycheck Protection Program, giving them more flexibility to qualify for loan forgiveness. While the PPP application deadline remains the same (June 30), the new bill:
    • Allows businesses to spend a minimum of 60% of the loan money on payroll, without negatively affecting loan forgiveness, rather than 75%, as initially stipulated.
    • Extends the loan forgiveness period from 8 to 24 weeks, ending Dec. 31, though a borrower can elect the 8-week period.
    • Extends rehiring exemptions, letting employers rehire until Dec. 31, rather than June 30.
    • Extends the loan life to five years instead of two, with the interest rate remaining at 1%.
    • Removes the requirement that borrowers who received loan forgiveness cannot defer  payroll taxes under another CARES Act relief.
    • Removes the 6-month deferral on repayments and states the loan does not need to be repaid until the loan forgiveness application has been processed and completed.
    • Gives those who have received loan forgiveness up to 10 months after the end of their covered period to apply for forgiveness.
  • The Employee Retention Credit (ERC) is a payroll tax credit of up to $5,000 per employee for eligible employers. The credit is equal to 50% of “qualified wages” paid to employees during a quarter, capped at $10,000 of “qualified wages.” Though this benefit is not limited to small businesses, those that receive a loan through the PPP are ineligible for the ERC (and vice versa).  Other considerations, according to the IRS FAQ, include:
    • If the employer received a tax credit for paid sick and family leave under the Families First Coronavirus Response Act, those wages must be excluded from this credit.
    • Wages that count toward the credit cannot be counted for the credit for paid family and medical leave under section 45S of the Internal Revenue Code.
    • Employees are not counted for this credit if the employer is allowed a Work Opportunity Tax Credit under section 51 of the Internal Revenue Code for the employee.
  • The Economic Injury Disaster Loan (EIDL) program and the Economic Industry Disaster Loan Emergency Advance (Emergency Economic Injury Grant)—businesses can receive a $10,000 advance, which will not have to be repaid, even if a business is denied a loan under the program. EIDL repayment is deferred for four months. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid. As of this writing, these programs are accepting applications only from U.S. agricultural businesses.
  • Certain tax benefits, including the abilities to carry back net operating losses (NOLs) five years and carry them forward indefinitely; delay payment of payroll taxes; use the corrected qualified improvement property benefit; and use expanded business interest expense deductions.
  • The Express Bridge Loan (EBL) pilot program, which allows lenders within the SBA’s Express Lender program to provide expedited interim loans of up to $25,000 while they wait for approval for the EIDL.


Small and mid-sized (up to 15,000 employees) to large (15,001+ employees) businesses

For small to mid-sized companies to large businesses , there are three main sources of relief: the Main Street Lending Program, other CARES Act Title IV loan options, and debt restructuring.  These options are even available if they already received a PPP funds or an EIDL.

CARES Act: Title IV of the CARES Act supports small to mid-size and large businesses through a $500 billion loan program for eligible businesses, including businesses that received Paycheck Protection Program funding. The economic stabilization plan authorizes the Secretary of the Treasury to make loans, loan guarantees and other investments of up to $500 billion to eligible businesses operating not only in severely distressed sectors of the economy, such as airlines and businesses critical to maintaining national security, but also across all sectors of the economy. Unlike the CARES Act’s forgivable loan program for small businesses, these loans must be paid back and come with borrower certifications and covenants as well as public disclosure requirements.

Main Street Lending Program: Among the actions taken offering companies liquidity, the Treasury made a $75 billion equity investment using appropriated funds from the Title IV section of the CARES Act in a special purpose vehicle (SPV) established to implement the Main Street Lending Program facility. This option was initially aimed at the 40,000 medium-sized businesses that employ 35 million Americans; however, the term sheets were revised to include small businesses as well.   

The program will either expand businesses’ existing lines of credit (Main Street Existing Loan Facility, or MSELF) or originate a new loan facility (Main Street New Loan Facility, or MSNLF, and Main Street Priority Loan Facility, or MSPLF).

On June 8, the Federal Reserve Board amended the program to make it more accessible to more businesses. The Fed’s changes include:

  • Lowering the minimum loan size for certain loans to $250,000 from $500,000
  • Increasing the maximum loan size for the MSELF to $300 million, up from $200 million
  • Increasing the maximum loan size for the MSPLF to $50 million, up from $25 million
  • Increasing the maximum loan size for the MSNLF to $35 million, up from $25 million
  • Increasing the term of each loan option to five years, up from four years
  • Extending the repayment period for all loans by delaying principal payments for two years rather than one
  • Raising the Reserve Bank's participation to 95% from 85% for all loans

The Fed hasn’t changed the parameters around qualifying for the loan or the combined size of the facilities. To qualify for a now five-year loan, companies must either employ up to 15,000 employees or have 2019 annual revenues of $5.0 billion or less. The combined size of the facility, including the MSELF, MSNLF and MSPLF, will be up to $600 billion, but the Department of Treasury indicated this may be increased beyond $600 billion depending on the popularity of the Main Street Lending Program.

To qualify, applicants must not have received specific support pursuant to the Coronavirus Economic Stabilization Act of 2020 (Subtitle A of Title IV of the CARES Act). Applicants may participate in only one program (MSELF, MSNLF or MSPLF).

On June 15, the Federal Reserve announced that the Main Street Lending Program is open for lender registration, signaling that the first loans will be made to borrowers as soon as lenders can complete registration and implement the loan program within their own operations.  

Also on June 15, the Federal Reserve announced two Main Street loan options for the nonprofit industry.


Applying the correct cocktail of relief

While these programs can provide much-needed relief to businesses, they are very complex and require thorough consideration of the possible accounting and tax implications of implementation. Businesses should assess their unique financial circumstances and cash flow needs to determine both their eligibility for the various programs available as well as the best option or suite of options to apply.

Businesses should also be fully aware of the requirements of these programs as well as their mechanics. What might trigger noncompliance with a program and what repercussions might there be for such noncompliance? For example, healthcare providers that receive aid through the CARES Act and don’t return the payment within 30 days of receipt are automatically considered to be in agreement with the terms and conditions that accompany the payment. In order to understand fully the strings attached to such funding programs, businesses across industries should closely read the fine print and consult with their advisors. 

Meanwhile, as of this writing House Democrats passed a $3 trillion relief package which Republicans have largely opposed. We will update this Insight as this and any other new relief measures develop. As these are passed and developments unfold, organizations should be undertaking a comprehensive investigation of the options that can help keep their businesses running through the ongoing coronavirus crisis. 


Relief program eligibility, by business size:

PPP* ERC* NOL Changes* EIDL/A* QIP* Main St EBL*
Small Businesses X X X X X X X X
Mid-Size     X X   X X  
Large     X X   X X  

 ⴕ The PPP and ERC are mutually exclusive. Given the level of complexity in applying provisions from the available federal relief programs, it is critical that organizations consult their tax professionals to maximize savings.
*CARES Act benefit
ⱡ QIP is available to taxpayers that make improvements to the interiors of existing nonresidential real property. The restaurant, retail and hospitality industries are generally associated with this benefit, but it can apply to any industry that meets its requirements. 

FFCRA=Families First Coronavirus Response Act
PPP=Paycheck Protection Program
ERC=Employee Retention Credit
NOL Changes=Net Operating Loss Changes
EIDL/A=Economic Injury Disaster Loan and Economic Injury Disaster Loan Advance
QIP=Qualified Improvement Property
EBL=Express Bridge Loan