The relief program for small businesses in America (Paycheck Protection Program, or PPP) has rightly garnered a lot of attention, as it has been open to the public (and to public scrutiny) for weeks, taking applications for critically-needed funds to keep many millions of businesses solvent during the pandemic. Congress appropriated the funds with guidelines and spending restrictions that include incentives to retain workers, with the aim to protect individuals as well as the companies they work for.

But what of the $500 billion in additional funding that is earmarked for large corporations? This is a separate bucket of money from the PPP (though many large companies still tried to access the funding set aside for small ones), and it includes:

• $17bn for national security companies
• $58bn for airlines
• $425bn for "other" companies

Who is eligible for this funding?

CARES Act Programs for Businesses Too Large for the Paycheck Protection Program (National Law Review)

This article from April 2 outlines the 4003(b)(4) Programs, created for mid-size businesses with 500 - 10,000 employees, both for-profit and nonprofit entities, including limitations and certifications each business will be required to produce.

Here Are the Companies Getting Federal Covid Relief Funds (Bloomberg)

Bloomberg has a list (updated April 20) of the companies that are confirmed to be receiving monies from the federal programs created for large businesses. This list encompasses the airline and national security industries as well as the 'other' category.

CARES Act Overview (Morgan Stanley)

Morgan Stanley has a broad overview of the CARES Act's key provisions. Check out #3, which covers funding for mid-size and large businesses in both direct funding support (e.g. to airlines), and protecting liquidity. I found their graphic extremely useful to understand the different avenues of financial support, particularly as I haven't found that much direct information on mid-size or large company programs and how they are working or will work.

Concerns

The U.S. plans to lend $500 billion to large companies. It won’t require them to preserve jobs or limit executive pay. (Washington Post)

While small business funding under the PPP is restricted to costs associated with a company's workforce, it appears that large companies are not being held to the same standard on receiving staggering amounts of federal money. From the article: "“I am struck that the administration is relying on the good will of the companies receiving this assistance,” said Eswar Prasad, a former official at the International Monetary Fund and economist at Cornell University. “A few months down the road, after the government purchases its debt, the company can turn around and issue a bunch of dividends to shareholders or fire its workers, and there’s no clear path to get it back.”

Treasury Secretary Mnuchin defends the $500 billion federal lending program for large corporations, which came without many strings attached (Business Insider)

From the article: ""Even before these facilities are up and running, they've had their desired impact of having stability in the markets," he told the newspaper. "Stability in the markets allows companies to function, and raise money and allows them to keep and retain workers and get back to work."

The CARES Act blog is intended to provide information and is accurate and true to the best of the author's knowledge. The author is not a legal, medical or financial professional and the information presented should not be considered advice and is for reference only. Lehigh Valley Public Media and its employees claim no liability for any actions taken by readers based on the information provided here.