Q&A: Loans to Air Carriers and Eligible Businesses and National Security Businesses 

Updated as of April 10, 2020 

GENERAL 

1. What is this loan program? 

The Coronavirus Aid, Relief and Economic Security (CARES) Act provides funding for up 

to $46 billion in loans to certain eligible businesses related to losses incurred as a result of 

coronavirus. Eligible businesses include: 

• passenger and cargo air carriers; 

• U.S. businesses that have not otherwise received adequate economic relief in the form 

of loans or loan guarantees provided under the CARES Act that are 

o certified under 14 CFR Part 145 and approved to perform inspection, repair, 

replace, or overhaul services (“Part-145 certified repair station operators”); 

o ticket agents as defined in 49 U.S.C. § 40102; or 

o businesses critical to maintaining national security. 

Specifically, $25 billion is available for loans to passenger air carriers, Part-145 certified 

repair station operators, and ticket agents; $4 billion is available for loans to cargo air 

carriers; and $17 billion is available for loans to businesses critical to maintaining national 

security. 

2. What is the purpose of the loan program? 

Borrowers can apply for loans to obtain liquidity to offset covered losses, which include 

losses incurred directly or indirectly as a result of the coronavirus pandemic, as determined 

by the Treasury Department. 

ELIGIBILITY, TIMING, ANDMECHANICS 

3. When can companies apply for loans? 

For air carriers, Part-145 certified repair station operators, and ticket agents, the Treasury 

Department has released a draft loan application form for informational purposes, to enable 

potential applicants to begin preparing the required information. As of April 6, 2020, the 

Treasury Department has not yet begun accepting applications. In the coming days, the 

Treasury Department will provide a web-based form for application submissions. 

For businesses critical to maintaining national security, the Treasury Department is 

developing guidance and application materials and expects to release these materials in the 

near future. 

4. What is “a business critical to maintaining national security”? 

A business critical to maintaining national security is one that, unless otherwise approved as set 

forth below, is at the time of the business’s application: 

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o (1) performing under a “DX”-priority rated contract or order under the Defense 

Priorities and Allocations System regulations (15 CFR part 700); or 

o (2) operating under a valid top secret facility security clearance under the National 

Industrial Security Program regulations (32 CFR part 2004). 

Applicants that do not satisfy either of these two criteria may be considered for loans if, based on a 

recommendation and certification by the Secretary of Defense or the Director of National 

Intelligence that the applicant business is critical to maintaining national security, the Secretary of 

the Treasury determines that the applicant business is critical to maintaining national 

security. Businesses that do not meet these criteria may nonetheless be eligible for assistance 

under other CARES Act programs. 

5. When and how will the loans be approved and disbursed? 

After the Treasury Department receives loan applications from potential borrowers, the 

Treasury Department will evaluate the application, communicate with applicants as 

appropriate, and make determinations regarding the timing of loan approvals and 

disbursements. 

PROGRAM REQUIREMENTS AND RESTRICTIONS 

6. Are there any requirements placed on borrowers? 

To receive a loan, a borrower must agree that: 

• It will maintain employment levels as of March 24, 2020 to the extent practicable, 

and in any case not reduce its employment levels by more than 10 percent from the 

levels on such date, at least until September 30, 2020. 

• Neither the borrower nor any affiliate of the borrower may purchase an equity 

security of the borrower or any parent company that is listed on a national securities 

exchange. This restriction does not apply if the borrower or affiliate is required to 

purchase such a security under a contractual obligation in effect as of March 27, 

2020. 

• It will not pay dividends or make other capital distributions with respect to the 

borrower’s common stock until 12 months after the borrower has repaid the loan. 

7. Are there restrictions on certain officers’ or employees’ compensation? 

Yes. Borrowers receiving a loan must agree to certain limits on the total compensation of 

certain officers and employees. These limits are described in Section 4004 of the CARES 

Act. These restrictions will end 12 months after repayment of the loan. 

8. Will there be service requirements for air carriers receiving a loan? 

Yes. The CARES Act authorizes the Secretary of Transportation to require air carriers 

receiving loans under this program to maintain certain scheduled air transportation. For more 

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information, see https://www.transportation.gov/coronavirus. 

TAXPAYER PROTECTIONS 

9. How will taxpayer funds be protected? 

The CARES Act generally requires that the Treasury Department receive a warrant or equity 

instrument in the borrower if the borrower is a public company, or a warrant, equity 

instrument, or senior debt instrument if the borrower is a private company. Applicants will 

be invited to submit proposals on the form and amount of taxpayer protections they propose 

to provide. Together with the other data and information provided in the applications, the 

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Treasury Department will develop standards for adequate and appropriate taxpayer 

protections. 

AVAILABILITY OF ALTERNATIVE FINANCING 

10. What evidence does the Treasury Department seek from applicants to demonstrate that 

credit is not reasonably available elsewhere? 

Under Section 4003(c)(2)(A) of the CARES Act, the Treasury Department may lend to 

eligible businesses for which credit is not reasonably available at the time of the transaction. 

The Treasury Department and its financial and legal advisors will take into account evidence 

from the prospective borrower’s particular circumstances, including its relationships with 

existing and potential creditors, as well as general market conditions. 

AVAILABLE FUNDS 

11. What happens if the total requests for loans exceed the maximum amounts of funds 

available under the CARES Act? 

The Treasury Department will use the data and information provided by applicants to 

determine how to allocate the funds available for loans in a fair and equitable fashion. 

COLLECTIVE BARGAINING AGREEMENTS 

12. Are there any limitations on loan conditions related to collective bargaining 

agreements? 

Yes. Under Section 4025(a) of the Act, the Treasury Department shall not condition the 

issuance of a loan on a borrower’s implementation of measures to enter into negotiations 

with the certified bargaining representative of a craft or class of employees of the borrower 

under the Railway Labor Act or the National Labor Relations Act regarding pay or other 

terms and conditions of employment. 

CONFIDENTIALITY 

13. Will the Treasury Department make a public statement acknowledging receipt of 

applications and naming applicants? 

From time to time, the Treasury Department may make public statements concerning the 

implementation of this program. The Treasury Department is not identifying specific 

applicants at this time. 

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14. Will the applications be made public or will they remain confidential? 

The Treasury Department does not intend to make applications publicly available, except as 

required by law. The Treasury Department may disclose applications as necessary to fulfill 

obligations under the CARES Act or other applicable law, including disclosure to: 

• the Department of Transportation, to coordinate concerning the implementation of the 

Loan program; and 

• the Treasury Department Office of Inspector General. 

The Treasury Department will also respond to requests for agency records as appropriate 

under the Freedom of Information Act (FOIA), including FOIA’s provisions related to 

confidential business information. 

For further details and application forms, please see the Procedures and Minimum Requirements 

for Loans to Air Carriers and Eligible Businesses and National Security Businesses. 

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