The United States Congress passed history’s biggest ever stimulus package last week, allocating $2 trillion for unemployment insurance, small business loans, healthcare funding, and other forms of direct support.
Designed to keep the economy functioning during the Coronavirus outbreak, the stimulus package is just the first step in managing what is fast becoming the worst financial crisis in living memory.
The White House advised over the weekend that it will start to release small business loan payments in the coming week.
Loans Dependent on Retention and Hires
$350 billion of the stimulus package has been allocated for small business operators that need relief during the ongoing crisis. Companies with fewer than 500 employees can apply for loans up to $10 million. These loans must be used to cover rent, wages/salaries, and other operating costs for up to two months.
The government will completely forgive the loans for some companies that meet specific requirements. Details surrounding eligibility are yet to be confirmed.
U.S. Treasury Secretary Steven Mnuchin said during a Sunday interview that the government encourages small companies to apply for the loans so that they can retain current staff or rehire workers that have been let go this month.
There’s good news for companies that are struggling. Mnuchin and White House Economic Advisor Larry Kudlow have advised that the program would start as early as this coming Friday.
How Long Will Businesses Need to Endure the Economic Shutdown?
26 states are currently locked down or under stay-at-home advisories for all but essential businesses and public services. Some businesses have allowed staff to work from home.
California, America’s largest single-state economy, was the first to implement a lockdown on March 19.
President Trump has spoken publicly on reopening the economy in these states, saying last week that he would like to see orders lifted by Easter. However, the situation has quickly developed, making this unlikely. The U.S. now has more than 139,000 confirmed coronavirus cases and over 2,400 deaths. Globally, Coronavirus has been confirmed in 721,000 people, of which over 33,000 have died.
When asked how long the crisis would last, Mnuchin said that “It’s hard to predict anything. We need to get people back to work as quickly as we can, subject to medical conditions.”
While it’s impossible to predict how far the virus and its economic impact will go, investors and citizens across the nation can take some comfort knowing that there will be financial aid to protect the most vulnerable people and businesses.
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