In the early hours of Wednesday, March 25, 2020, Congress and the White House announced that they have reached a deal on an approximately $2 trillion stimulus package to assist American businesses, individuals, and the American economy as a whole, impacted by the COVID-19 pandemic. While the text of the bill is not complete, lawmakers on all sides believe that the bill will quickly find its way through Congress and onto the President’s desk. It is expected that the Senate will vote on the bill on Wednesday, March 25, 2020.
In recognition of the severe impact the COVID-19 pandemic on small businesses, the stimulus package is expected to provide approximately $367 billion in loans to small businesses through the Small Business Administration and banks, including, without limitation, $10 billion for emergency grants by the Small Business Administration of up to $10,000 each. It is also anticipated that the bill will provide for the conversion of certain loans taken by small businesses used for payroll, mortgage or rent to grants. Further, the bill is expected to include a series of tax credits for certain businesses that retained employees despite being forced to close or that faced a significant loss of income due to the COVID-19 pandemic. More details will emerge as the text of the legislation is finalized in the coming days, but it is clear that these measures, along with those announced by the Federal Reserve on March 23, reflect an acute awareness by legislators of the necessity to help small-to-medium sized businesses navigate this difficult economic climate.
In addition to the measures detailed above, the stimulus package is reported to include:
- A $500 billion fund providing loans for industries (like the airline industry, for example), cities, and states;
- Enhanced unemployment insurance benefits, including broader eligibility standards and additional Federal payments on top of state benefits;
- Plans to send cash totaling $250 billion to most households, distributed as follows:
- $1,200 government payments to those earning up to $75,000 per year, with an additional $500 per child; and
- Smaller checks to those earning more, with an upper eligibility limit of $99,000 in income.
- Approximately $150 billion targeted at state, tribal and local relief funds for COVID-19; and
- Approximately $130 billion earmarked for hospitals.
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