As companies navigate the uncharted waters of an economic downturn, business leaders need to have all the tools and resources available to chart their course ahead. Leveraging government economic incentives present a vital support option for businesses to evaluate as they develop their strategic plans for the near and long-term future.
Programs and policies have been enacted over the years to aid companies in the best and the worst of economic times – now is when to use them. At the same time, national and local governments are also rolling out stimulus measures to buoy their economies for the difficult path ahead.
On the new HICKEY microsite, Economic Recovery Incentives – Government Support for Businesses, our global team will be contributing insights and updates of the macro, as well as, the bespoke, programs and initiatives around the world your business should know about. To keep up with the latest details and updates, please sign up for our e-alerts.
In the United States, Congress has already approved two major pieces of legislation which has extended extensive loan financing for small businesses, appropriated robust funding for unemployment and social programs, and addressed traditional paid sick leave requirements, among a list of other economic support initiatives. These provisions are on top of significant moves by the U.S. Federal Reserve, including an unscheduled cut to the fed funds rate and restarting of quantitative easing.
Trump Administration officials and Congressional leaders are now working a third phase of the stimulus effort, which reportedly could be in the realm of $2 trillion in funding being allocated to individuals and businesses across the country.
Many states and local governments have also started to introduce economic measures and policy shifts to provide support for their constituent businesses. We’ll be constantly updating and adding to the list of states and localities as they roll out and approve these new initiatives. Below are a several examples of states and communities which are already leading the way.
Coronavirus Aid, Relief, and Economic Security (CARES) Act
The House of Representatives joined the Senate in approving more than $2 trillion in funding as part of the third phase of emergency relief and economic stimulus as the nation faces an unprecedented pandemic crisis. The bill was signed into law soon after by President Trump.
Known as the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the legislation provides emergency relief, extension of social benefits, rebate payments to individuals, and expanded business support mechanisms, among a number of key economic policies.
HICKEY’s Incentives and Research team has assembled the following summary of key items within the recently approved legislation.
Federal Reserve Actions to Support Businesses
To provide direct support for employers and households, the Federal Reserve recently announced up to $2.3 trillion in loans to be delivered across multiple mechanisms and platforms. The following are several of the financing initiatives rolled out by the Federal Reserve on April 9th:
Paycheck Protection Program Liquidity Facility (PPPLF)
Through PPPLF, the Federal Reserve will extend credit to eligible financial institutions that originate Paycheck Protection Program (PPP) loans, allowing the loans as collateral at face value.
Main Street Lending Program
To ensure credit flows to small and mid-sized businesses, the Federal Reserve is set to purchase up to $600 billion in loans through the Main Street Lending Program. The Department of Treasury will provide $75 billion in equity to the facility, which is funding allocated from the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
Primary & Secondary Market Corporate Credit Facilities (PMCCF / SMCCF) & Term Asset-Backed Securities Loan Facility (TALF)
Aiming to increase the flow of credit to businesses and households via capital markets, the Federal Reserve will be expanding the size and scope of PMCCF, SMCCF, and TALF to support up to $850 billion credit. The financing will be supported by $85 billion in credit protection from the Treasury Department. Asset ranges for TALF have also been expanded under the new initiative.
Municipal Liquidity Facility
Leveraging funds appropriated by the CARES Act, the Federal Reserve will provide up to $500 billion in lending to states and municipalities through a Municipal Liquidity Facility. The short term notes will be purchased directly from U.S. states and Washington, DC, counties with at least two million residents, and cities with more than one million residents.
Additional guidance on these new financing mechanisms from the Federal Reserve can be found on their official website.
Being the first to be faced with the Coronavirus (COVID-19) disease, several governments in the Asia-Pacific (APAC) region quickly enacted new policies and programs to support their economies.
Following suit several others have since developed support initiatives to keep their key industries afloat in a new, uncertain world.
Below are a number of the economic initiatives and incentive programs enacted around the dynamic APAC region designed to support business during and after the economic downturn.
Across the European landscape, nations are battling varying scales of economic disruption today. However, as many fear, the true economic and societal challenges in the region still lie ahead.
The European Union (EU) has a number of programs which have been developed to support businesses in the difficult times.
Aside from EU measures, nation states and regional governments have been instituting their own policy shifts, tax concessions, and incentive schemes.
In the following, our experts review the programs and schemes developed to support businesses navigate the economic downturn.
As your business addresses the ongoing crisis, as well as, looks towards the future, having all the tools and resources available to your company is essential. Hickey’s global experts are standing by today to provide guidance and comprehensive support to ensure client’s are best-positioned for the future.Further, this challenging period will put businesses in danger of not meeting incentive compliance commitments and requirements. Our incentives compliance experts are available to provide advise.
Our team provides the best-in-class support that is truly comprehensive. We ensure our clients realize the full value of an incentive package, all while minimizing the risk to the business!These services are for the full life cycle of the incentive, which includes the identifying, negotiating, securing, legal construction, and compliance and aftercare. We are committed to providing high-quality personalized service with integrity and intelligence, which is critical when securing public incentives for our clients.
Our team provides the best-in-class support that is truly comprehensive. We ensure our clients realize the full value of an incentive package, all while minimizing the risk to the business.
These services are for the full life cycle of the incentive, which includes the identifying, negotiating, securing, legal construction, and compliance and aftercare. We are committed to providing high-quality personalized service with integrity and intelligence, which is critical when securing credits and incentives for our clients.