Economic Stabilization Loans & Loan Guarantees

Economic Stabilization Loans & Loan Guarantees

Updated April 1, 2020


The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) also includes Economic Stabilization Loans & Loan Guarantees. These loans and loan guarantees are for businesses of all sizes in industries most impacted by the COVID-19 pandemic through the Federal Credit Reform Act of 1990, administered by the Treasury Secretary, specifically:

  • cargo air carriers,
  • passenger air carriers
  • businesses approved for inspection, repair, replacement, overhaul and ticket agents, and
  • businesses critical to maintaining national security

Eligible businesses must have incurred covered losses, direct or incremental, incurred as a result of coronavirus, as determined by the Treasury Secretary. Further, the Treasury Secretary will make loans and loan guarantees to, and other investments in, programs or facilities to provide liquidity to the financial system that supports lending to eligible businesses, States, or municipalities.



  • Provides $29 billion to aviation companies, $17 billion to businesses critical to maintain national security and $454 billion to other negatively impacted businesses through loan, loan guarantees and other investments in programs and facilities through the Federal Reserve.
  • States and Municipalities may receive loans, loan guarantees and investments from the amounts listed above -- as long as the total amounts awarded through the program do not exceed $500 billion.
  • The CARES Act does not provide a specific allocation distribution of direct loans vs. loan guarantees, nor does it include language on maximum amounts.
  • Provides limits on wage increases to high-wage employee compensation during a two-year period.


SBA UPDATES: With the updates and changes to law coming rapidly and often, you may sign up to receive updates from the SBA directly at:


The information above is intended to act as a general resource and therefore does not address all considerations and jurisdiction-specific analyses that may need to be undertaken prior to taking action. Thus, employers should seek specific counsel.