April 1, 2020
By John F. Wilcox, Jr. and Benjamin J. Stringer
On March 27, the U.S. House of Representatives passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was almost immediately signed by President Trump, to help lessen the economic impact caused thus far by COVID-19.
The Act provides for $500 billion in loans, loan guarantees or other business assistance. Some provisions are designed to directly benefit the transportation industry and others benefit members of the transportation industry with 500 or fewer employees. It should be noted that the transportation industry-specific provisions of the CARES Act only benefit the airline industry. As such, this update will first address the provisions benefiting only members of the airline industry and then the provisions that benefit all members of the transportation industry with 500 or fewer employees.
Airlines, Air Carriers and Contractors of Air Carriers
In the CARES Act, airlines, air carriers and contractors of air carriers are eligible to receive loans, including:
- $25 billion in guaranteed loans for passenger air carriers.
- $4 billion in guaranteed loans for cargo air carriers.
- $3 billion in guaranteed loans for contractors (entities working with and for airlines on airport property).
- $25 billion in pandemic relief for passenger air carriers, to be used for the continuation of employee wages, salaries and benefits. Businesses accepting this relief must refrain from conducting involuntary furloughs or reducing pay rates and benefits until September 30, 2020. Businesses can receive this assistance as soon as 10 days after the passage of the Act.
- $4 billion in pandemic relief for cargo air carriers, to be used for the continuation of employee wages, salaries and benefits. Businesses accepting this relief must refrain from conducting involuntary furloughs or reducing pay rates and benefits until September 30, 2020. Businesses can receive this assistance as soon as 10 days after the passage of the Act.
- $3 billion in pandemic relief for contractors, to be used for the continuation of employee wages, salaries and benefits. Businesses accepting this relief must refrain from conducting involuntary furloughs or reducing pay rates and benefits until September 30, 2020. Businesses can receive this assistance as soon as 10 days after the passage of the Act.
Transportation Companies with 500 or Fewer Employees
In the CARES Act, transportation companies with 500 or fewer employees are eligible to receive loans, including:
- $350 billion in guaranteed loans to businesses with 500 or fewer employees between February 15, 2020, and June 30, 2020. Businesses that qualify for loans under this provision can secure a maximum loan of $10 million. These loans may be used for payroll, rent, utilities, interest payments on mortgages and debt obligations.
- $17 billion for loan subsidies for those with previously existing small business loans.
- $17 billion in guaranteed loans for businesses critical to maintaining the national security.
- Payroll tax deferral until January 1, 2021.
Your business may qualify for a loan or business assistance provided for in the CARES Act. Dysart Taylor is prepared to assist you in understanding and utilizing the CARES Act to protect your business. Contact our offices today to figure out how the CARES Act can help you and your business during this pandemic.
Please contact John Wilcox (816-714-3046 or jwilcox@dysarttaylor.com) or Benjamin Stringer (816-714-3076 or bstringer@dysarttaylor.law) for assistance with coronavirus-related transportation and business issues.