The United States Senate has passed a $2 trillion stimulus bill and it is now on its way to the President for approval. You likely have some questions about what this means for you as an individual, or as a business owner. This article will briefly discuss how this stimulus bill works. To be perfectly clear, it’s far too early to tell exactly how this will impact the overall market: people could spend the additional money, giving the economy a growth spurt, or they could hunker down and save it for a rainy day giving the market little-to-no benefit in the short term.
As an initial matter, this stimulus bill is designed to aid businesses that are feeling the effects of this virus, businesses including: manufacturing for airlines, airlines themselves, retail businesses, and other small businesses that may not be able to keep their doors open through this virus; this assistance takes the form of $375 billion in loan forgiveness to small businesses, so they can continue to operate.
The stimulus bill further provides $150 billion in aid to hospitals, with $100 billion earmarked for direct aid to hospitals that are fighting the virus on the front line. The other $50 billion will ostensibly be used to aid hospitals that will be hit but haven’t been hit hard yet.
Individuals are receiving one form of aid through an extension of benefits, including $250 billion to extend unemployment insurance by 13 weeks, and unemployment benefits by 4 months. The fact that businesses will be able to cover their operating costs during a time of virtually no business, and employees will be able to weather the storm, should provide an optimistic prognosis for the country’s economy when the Coronavirus has run its course.
In a nutshell, this bill has provided: (1) $500 billion in cash payments to individuals; (2) $375 billion in loans to small businesses; (3) $250 billion in extending social safety nets (unemployment); (4) $500 bullion of loan relief for distressed industries; and (5) between $300 billion and $425 billion for special purposes vehicles to aid the medical industry in combating this virus effectively.
At the Chernov Team we understand that knowledge is power, and knowledge of how the federal government is responding to this pandemic is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.
