The effects of the coronavirus (COVID-19) pandemic have not only dramatically affected the way we lead our personal lives but have also shifted the business landscape, creating new and unprecedented challenges. We understand that in times like these, businesses like yours, may need our support now more than ever, and we want you to know that Popular is here for you.
On March 27th, the Federal government passed historic legislation designed to help businesses and their employees impacted by this pandemic under the Coronavirus, Aid, Relief and Economic Security Act (CARES Act). This new program generally:
- Authorizes $349 billion until June 30th, 2020 for 100% guaranteed Small Business Administration’s (SBA) 7(a) loans to cover payroll costs, interest on mortgage payments, rent obligations, and utilities.
- Applies to businesses with fewer than 500 employees or those that meet SBA current size standards for 7(a) loans (the 500-employee rule could be applied on a per physical location basis in certain industries).
- Applies to sole proprietor, self-employed individuals, and individual contractors.
- Applies to certain nonprofits including 501(c)(3) organizations with fewer than 500 employees.
- Establishes a Paycheck Protection Program (PPP) which provides:
- 100% SBA guaranteed loans to cover payroll costs, interest on mortgage payments, rent obligations, and utilities.
- Loans can be up to 2.5 times the borrower’s average monthly payroll costs, not to exceed $10 million (certain restrictions apply).
- Preferential interest rate of 1% for a 2-year loan term
- A portion of any loan issued as part of the PPP, up to 8 weeks of covered expenses, will be forgiven by SBA and paid to the lender, plus interest.
- Authorizes $10 billion for additional Emergency Injury Disaster Loans (EIDLs) to be applied to and disbursed directly by SBA.
As of today, the SBA is finalizing the program guidelines that will instruct us on the requirements we must follow to offer the program, but rest assured that our team stands ready. Popular will have the capabilities to offer you the government-backed relief programs under the CARES Act.
We recognize time factor will be of essence, so we will be communicating the details of how Popular will be operationalizing this program in the coming days.
For updated information on your possible participation on these government-backed relief programs, visit popular.com/coronavirus, contact your Relationship Officer or call our Business Banking Center at 787-756-3939.