Established by the CARES Act, the 4003 Loan Program authorized the Treasury Department to make loans, loan guarantees, and other investments to provide liquidity to eligible businesses related to losses incurred due to the coronavirus pandemic. Under this program, the Treasury Department provided approximately $2.7 billion in loans to 35 eligible businesses, including passenger air carriers, repair station operators, ticket agents, cargo air carriers, and businesses critical to maintaining national security.
The 4003 Loan Program provided an emergency credit line for large and small businesses unable to obtain credit elsewhere during the height of the pandemic, thereby reducing COVID-19-driven bankruptcies, protecting pensions, and, together with the Payroll Support Program, avoiding long-term reductions in aviation capacity.
To the extent practicable, the CARES Act required borrowers to agree to maintain their March 24, 2020, employment levels between that date and September 30, 2020. In accordance with the statute, borrowers also were required to agree to certain employee compensation restrictions; agree not to repurchase stock; and agree not to pay dividends or make other capital distributions until 12 months after the loan is fully repaid to the Treasury Department.
Further, the CARES Act required that the Treasury Department receive certain financial protections in making a loan, in the form of a warrant or equity interest if the borrower is a public company, or a warrant, equity interest, or senior debt instrument if the borrower is a private company. As of June 2024, of the 35 loans that the Treasury Department provided, 20 borrowers owe a combined $213 million. Fifteen borrowers have fully repaid their loans for a combined $2.5 billion in principal repayments. Borrowers have paid more than $182 million in cash interest payments.
DATA CURRENT AS OF 1/21/2021