Overview of CARES Act Stimulus Programs for the Business Sector
After the outbreak of the COVID-19 global pandemic, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020. The law authorized several stimulus programs aimed at supporting the business sector, which poured billions of taxpayer–backed loans and grants into the U.S. businesses.
Major CARES Act programs for businesses include the following:*
- The Airport Grant Program provided approximately $10 billion to support airports experiencing severe economic disruption due to the COVID-19 pandemic. Read more about the program here.
- Loans to Air Carriers, Eligible Businesses, and National Security Businesses provided $25 billion for loans and loan guarantees to passenger air carriers, repair station operators, and ticket agents. It also provided up to $4 billion for loans and loan guarantees to cargo air carriers, and up to $17 billion for loans and loan guarantees to businesses critical to maintaining national security. Read more about the program and loan recipients here.
- Economic Injury Disaster Loans distributed through the Small Business Administration (SBA) provided economic relief to small businesses and non-profits experiencing a temporary loss of revenue. Read more about the program here.
- Higher Education Emergency Relief Fund was authorized to distribute approximately $14 billion in grants to public, non-profit, and for-profit colleges and universities. The law required that a certain portion of these grants go to providing emergency aid for students. Read more about the program here.
- The Main Street Lending Program was one of several programs established using the $454 billion allocated to the Treasury Department in order to support Federal Reserve emergency lending programs. The Treasury allocated $75 billion to the Federal Reserve’s Main Street Lending Program to support up to $600 billion in loans for nonprofits and small and mid-sized businesses that were in sound financial condition prior to the pandemic. Read more about the program here.
- The Paycheck Protection Program: The CARES Act authorized the Small Business Administration (SBA) to provide forgivable loans to small businesses in order to incentivize businesses to keep their workers on payroll. It has authorized more than $700 billion in loans thus far. Read more about the program here.
- The Payroll Support Program offered payroll support to passenger air carriers, cargo air carriers, and certain contractors to support employee payroll and benefits. Up to $25 billion was made available for passenger air carriers, $4 billion for cargo air carriers; and $3 billion for certain contractors. Read more about the program here.
- The Secondary Market Corporate Credit Facility was one of several programs established using the $454 billion allocated to the Treasury Department in order to support Federal Reserve emergency lending programs. The treasury allocated $25 billion to the Federal Reserve’s Secondary Market Corporate Credit Facility to support market liquidity by purchasing corporate bonds in the secondary market. Read more about the program here.
Although many of these programs were a lifeline to businesses that were impacted by the pandemic, struggling businesses were not the only beneficiaries of government stimulus funds. Large, well-financed corporations received stimulus funds, often at the expense of smaller firms that were struggling to survive. Moreover, many businesses that received funds failed to protect their workers and, in some cases, failed to adhere to government guidelines.
*This is not an exhaustive list of CARES Act relief programs. It does not include tax-breaks that benefitted corporations, nor does it include programs for health care providers.