What the CARES Act means for US businesses

Including implications for sectors, small business and non-profits

The US government has infused trillions of dollars into the economy to offer relief to people and businesses adversely affected by efforts to “flatten the curve” of the COVID-19 (coronavirus) pandemic. The Coronavirus Aid, Relief & Economic Security (CARES) Act, and its follow-up -- the Enhancement Act, represent the third and fourth rounds of relief that seek to stabilize and stimulate the US economy, with nearly $3 trillion in funding. The CARES Act is a stimulus bill enacted by Congress to bridge the economic gap many businesses are experiencing due to shelter-in-place orders.

Half (49%) of finance leaders surveyed by PwC in a bi-weekly survey say their company plans to take advantage of various government relief programs, most notably the CARES Act that includes loans, loan guarantees, grants, assistance payments, contracts and tax incentives.

Businesses should take the time to understand the scope of economic support programs available for assistance, as well as the conditions and reporting obligations that may follow. The opportunities are significant, and for some businesses, they can be an imperative to increase cash flow and retain employees.

More payments programs are coming up to help businesses get access to cash. The Federal Reserve's $600 billion program, which will work through banks, is intended for medium-sized businesses that meet an employee or revenue threshold, and the IRS expects to start sending stimulus payments to qualifying Americans beginning in mid-April.

Companies must ensure they can meet the requirements and remain CARES Act compliant with funding access restrictions.

*Updated 5/13/20


Of the 49% of CFOs who said they’re considering taking advantage of any government programs…

Which of the following is your company planning on or considering taking advantage of? (Select all that apply.)

Tax payment deferral or extension of deadlines
%
Other tax provisions (e.g., modifications to net operating loss limits, temporary amnesty if taxes are overdue)
%
Loans and loan guarantees
%
Flexible benefits for employees as a result of mandatory reduced hours, furloughs or lay offs
%
Subsidies or reduction of government fees
%
Other benefits at the state or local level
%
Grants
%
Emergency funding
%
Source: PwC COVID-19 US CFO Pulse Survey
April 8, 2020: base of 153

The five ways the CARES Act targets relief

Lending facilities

The Act provides $500 billion for a Treasury Department Exchange Stabilization Fund to provide loans, loan guarantees and other investments to eligible businesses, as well as $349 billion for a Small Business Administration “paycheck protection” program.

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Tax relief for business

The legislation includes a five-year net operating loss (NOL) carryback, payroll tax relief and other significant provisions for businesses.

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Tax relief for individuals

The legislation includes "recovery rebate checks" of up to $1,200 for individuals, $2,400 for married couples, and $500 per child, which will begin phasing out after $75,000 for a single filer and $150,000 for a joint filer.

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Direct spending

The legislation includes $340 billion in emergency funding for hospitals, healthcare agencies and assistance to state and local governments responding to the COVID-19 virus.

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Paycheck Protection Program

Small businesses can seek forgivable loans from the government to cover expenses and maintain their payroll. Recent changes to the PPP program include:

  • The window businesses have to use the funds is extended from eight weeks to 24 weeks.
  • The previous deadline of June 30 to rehire workers (And still qualify for full loan forgiveness) has been extended to Dec. 31, 2020.
  • More leeway is given on loan forgiveness for business owners who show they could not rehire workers or reopen due to safety standards.
  • Extends the time recipients have to repay the loan - allowing deferral through 10 months from loan origination.
  • The bill allows companies that get loan forgiveness from PPP to continue to defer payroll taxes through the end of 2020.

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CARES Act opportunities by sector

Relief opportunities are not “one size fits all” for every business. Particularly, the funding options available differ by each sector. The available relief options will dictate the different strategies that each unique business will take.

  Loans/
Investments
Specialized
Grants
Specialized
Contracts
Other
Relief Funds
Tax
Relief
Aerospace and Defense  
Agriculture    
Airlines    
Energy      
Financial Services      
Healthcare
Higher Education  
Hospitality      
Industrials/Manufacturing      
Media & Telecom      
Pharma/Life Sciences  
Technology    

CARES Act: Resources for Small Businesses and Nonprofits

Below are resources that can help small businesses and nonprofits navigate the relief programs available under the act. We will continue to add and update resources on this page as things evolve.

Overview for Small Businesses and Nonprofits

  • Coronavirus Small Business Guide: This resource provides coronavirus coverage from the US Chamber of Commerce, and is updated daily with new resources to help assist both small businesses and nonprofits, including A Guide to Reopening Your Business.
  • Coronavirus Relief Options:  The US Small Business Administration explains the different funding options for those seeking relief.
  • PwC’s COVID-19 Update on CARES Act: This webcast includes an update on CARES Act developments and other business considerations in the midst of COVID-19 for privately-held businesses. 
  • PwC's COVID-19 Relief Legislation Webcast: This webcast includes an overview of the incentives provided in the COVID-19 relief legislation to help increase cash flow, retain employees and assess the impacts on your business both short and long term.

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Paycheck Protection Program (PPP)

Coronavirus emergency loans guide and checklist: This online pamphlet is an easy-to-read guide and checklist for small businesses and nonprofits navigating the Paycheck Protection Program.

Paycheck Protection Program Flexibility Act: This article provides information on the act that was finalized on June 5, 2020, including what it entails and how it will impact small business and nonprofits.

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Economic Injury Disaster Loans (EIDL)

Guide to SBA’s Economic Injury Disaster Loans: This online resource provides information on economic injury disaster loans for small businesses and nonprofits.

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Employee Retention Tax Credit

Guide to the Employee Retention Tax Credit: This guide helps small businesses and nonprofits navigate the tax credits for COVID-19 impacted employers.

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Specific Resources for Nonprofits

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Returning to the Workplace

  • Reboot: Returning to the workplace: This PwC playbook outlines what organizations need to consider to be ready to bring people back to the workplace.
  • Reboot: Getting back to the workplace: This PwC playbook highlights what organizations can do now to help meet the needs of their people and their business moving forward.
  • Check-In: This PwC product provides businesses with near real-time insights into workforce productivity and possible risk exposure.

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Philip Koos

Philip Koos

Partner, PwC US

John M. May

John M. May

Partner, PwC US

Suzanne Roske

Suzanne Roske

Partner, PwC US

George Prokop

George Prokop

Principal, PwC US