Broker Check

CARES Act: Myths Behind the Stimulus Package and the Potential Financial Impacts

| April 14, 2020

We’ve had many questions recently over the CARES Act and what it may entail and some of the myths behind it as well. So, we recently hosted a webinar covering such. If you’d like to see the recorded version of that 90-minute Webinar, you can do so here.

Throughout the webinar I covered the below topics and questions, I also had 3 guest speakers who covered other topics through out the webinar. Those guests speakers, their contact information, and the topics they spoke to are below. My guest speakers welcome questions or you reaching out regarding those topics.

Seth Feinman, JD – Topics: Mortgage financing, financial obligations, and the current financing market

Vice President of Silver Fin Capital

Direct: 516.659.5659


Colin R. O’Leary – Topics: Residential and multifamily real estate market, economic affects and potential opportunities

Real Estate Agent at Berkshire Hathaway HomeServices

Direct: 516.330.2756


Ian D. Savage - Topics: Retirement plans, CARES Act impact, equities and investment market

Partner at Professional Wealth Associates

Office: 516.997.6008


Cares Act Overview:

$2 Trillion stimulus bill, this is the largest spending bill ever passed.

The estimated break out of spending: $560 billion to individuals, $500 billion to big business, $380 billion to small businesses, $340 billion to state and local governments, $150 billion to public health, $50 billion to education, $26 billion safety net.

NO BENEFIT FOR TRUMP! The president, VP, any members of the cabinet and members of congress are barred from benefiting from the money carved out for businesses. The language specifically extends to “Spouse, child, son in law AND daughter in law.” The bill also creates a special inspector general and special oversight committee. As of now, that committee DOES NOT include the president, VP, cabinet members or family of thereof.

  1. I’m a business owner, does the stimulus bill help me?


  • There’s a $10,000 Grant available for small business to address immediate operating costs for small businesses
  • Loans are available for small businesses; portions of those loans are forgivable. The guidelines of what is forgivable:
    • Only the principle amount of the loans are forgivable
    • Only the portions of the loans spent on payroll costs, business rent/mortgage and utilities are forgivable
    • Said business must maintain 75% of payroll until the end of June. Payroll measurement is not of current payroll, but payroll as of February 15th
    • All loans and terms of loans will be made public
    • Companies are barred from stock buy backs during the term of the loan plus 12 months
  • Current SBA loans may be eligible for 6 months of payment deferrals
  • There’s up to a 50% tax deferral of payroll. The bill specifically states deferral, not forgiveness or waived
  • Small business go to, there will be a wait but loans through private lenders may not have to hold the same guidelines
  • Big businesses also have access to loans. Speak to your financial or legal professional to determine how to gain access to said loans
    • Big businesses are generally 500 employees or more
    • Only principle amount is forgivable
    • Big business that have illiquid assets may have to put up said assets as collateral
    • Loans are only supposed to be used for Payroll, business rent/mortgage and utilities
    • Must maintain 75% of payroll (as of Feb 15th) until end of June.
    • Not abiding by guidelines could result in heavy fines or forfeiture of assets put up as collateral


  1. I was furloughed/laid off/let go or self-employed, does the stimulus bill help me.


  • If you are self employed or an independent contractor, you also may be eligible for the $10,000 grant through the SBA. It doesn’t hurt to apply for it, worst case you don’t get it
  • Unemployment guidelines have been loosened, independent contractors and self-employed individuals may be eligible to apply for unemployment
  • APPLY THROUGH YOUR STATES WEBSITE!I’d expect an increase in scammers and fraudsters, going through your state’s website will hopefully minimize this.
  • Unemployment benefits have been expanded
    • There’s a $600 federal weekly benefit that pays for up to 16 weeks, this benefit is added on top of your states weekly benefit
    • State benefit period has been increased by 13 weeks
  • Most taxpayers will be receiving a cash stipend of $1,200; guidelines are:
    • Individuals whose most recent tax filing shows their annual income was $75,000 or less ($150,000 or less for married filing jointly)
    • Stipend decreases on income earners above $75,000 and those making more than $99,000 will not receive stipend ($198,000 for those filing jointly)
    • You will receive a cash stipend of $500 per child
  • As of April 6th, the IRS website state that stipend payments will be going out within 3 weeks
  • You do not need to do anything to receive the stipend, the funds will be mailed to you or electronically deposited. The IRS does not call or email people, if you receive a call or email it is likely a scammer. If you do not receive the stipend and are eligible go to the IRS website ( to contact the IRS


  1. Will businesses/individuals be able to abuse the financial incentives within the stimulus bill?

Of course

  • $2,000,000,000 will bring out a lot of fraudsters and scammers
  • The bill has many guidelines to prevent fraud, but it’s nearly impossible to eliminate
  • Go to your state’s website, or to reduce the chances of fraud


  1. What can businesses do to minimize risk and exposure to similar economic situations in the future?
  • Business should do there best to have 3-6 months of cash or cash equivalents in events like this
  • Business can utilize a Payroll Tax Reduction Plan to reduce business expenses and provide additional benefits to their employees
  • A Medical Cost Sharing Community (MCSC) can be used to reduce business healthcare expenses without sacrificing service
  • Captive insurance can be used to insure against specific events not insurable in the traditional insurance market. It can also create a new asset class that may provide liquidity in events such as a pandemic


If you would like to watch or listen to the 90 minute webinar we welcome you to do so, you can view or listen to that here.

If you have any questions regarding the above topics or would like more information you can contact my office here, or reach out to my at my contact information below.


Dan Nuwash, MBA

Founder and Managing Partner of Finance For Thought

Direct: 910.546.5463