Banco Popular announced the approval and disbursement of the first loans granted by the institution under the Paycheck Protection Program established by the Coronavirus Aid, Relief, and Economic Security Act (CARES).
The program went into effect on April 3 and will run through June 30. On Friday, Popular approved some $2.6 million in loans and, that disbursed a portion of the funds that same day, bank officials said.
The U.S. Small Business Administration-backed loans provides loans aim to help businesses cover payroll expenses, interest on mortgage payments, rental obligations, and profits during the COVID-19 emergency.
“We’re committed to helping our customers access these emergency funds as quickly and easily as possible,” said Eli Sepulveda, executive vice president of the bank’s commercial credit group.
To address the high volume of inquiries and applications, the institution created a dedicated tab on its website that includes program information and an online form to request information. The bank also confirmed it would soon activate a digital tool through which clients can complete their application online.
The Paycheck Protection Program is a $349 billion emergency loan program that provides forgivable loans up to $10 million to small businesses left financially distressed by the coronavirus COVID-19 pandemic. The loans have a fixed 1% interest rate and maturity of two years.
The loans, which will be administered at the local level by a national network of banks and credit unions, are designed to maintain the viability of millions of small businesses struggling to meet payroll and day-to-day operating expenses.
Popular invests $2M in tech
In an interview with this media outlet, Popular Inc. CEO Ignacio Álvarez confirmed that the bank has had to make a number of operational adjustments to continue providing services during the lockdown and curfew measures in place in Puerto Rico to contain the spread of the COVID-19 virus.
Banks and other financial institutions are among the essential services allowed to operate under the lockdown.
“When this started we thought we could run our operations pretty much as normal making minor tweaks, such as shortening our hours. But we realized that as the pandemic got worse we had to make big changes,” he said, mentioning trying to get fewer clients to go to the bank’s branches.
The bank encouraged clients to use all the digital tools Banco Popular has and increased the amount clients can withdraw from ATM’s and deposit using smartphones.
Of the 164 branches, Popular is running 114 branches, of which 94 have drive-thru windows. Lobbies are closed, but Popular will serve clients needing special services by appointment only.
“Clients are cooperating. For the most part, they would rather be in a line at the drive-up window than get sick by going into a lobby,” Álvarez said.
As for its employee base, Popular invested $2 million to purchase equipment, including some 1,500 laptops, and software licenses to enable remote operations, he added.
“We had to keep our support systems running, our technology team increased by a factor of 10 the number of people who can work from home. Most support staff are working from home,” he said, about the 4,000 people working remotely. Popular has 7,000 employees in Puerto Rico.