SBA Paycheck Protection Program

The Small Business Association (SBA) Paycheck Protection Program (PPP or Program) was the result of a historic legislation, called the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) designed to help businesses affected by the COVID-19 pandemic. The CARES Act authorized, in a first phase, $349,000 million and $310,000 million in a second phase for this Program.

At Popular, we have helped thousands of businesses to continue operating in these difficult times, and we remain committed to supporting you.

The application process for loans under the Program through Popular has expired. We are now ready to support you in the next step, the possible loan forgiveness by the SBA.

Loan Forgiveness

The Paycheck Protection Program is a loan designed to provide a direct incentive for certain businesses to maintain their operations and their workers on payroll. To that end, your PPP loan may be eligible for forgiveness in whole or in part. The amount of forgiveness depends on the amount of loan funds used for eligible expenses and compliance with certain requirements related to the retention of workers and their salaries.

If you already have an approved PPP loan by Popular, we are currently processing forgiveness applications. We will send you an email later, notifying you once our digital platform is available and the date which you will be able to start your loan forgiveness application. At this moment, the most important thing for you is to focus on resuming your business’ operations and documenting how you are spending the Program’s funds during the covered period.

You can be sure that this page will keep you informed of any update or change in the Program. We appreciate your trust and reiterate our commitment to continue offering financial solutions that meet your business needs.

Steps for the loan forgiveness process

Here are the steps that indicate how the Loan Forgiveness process will work through Popular. It is the client’s obligation to understand the rules and processes, as defined by the SBA.

Step 1

Prepare to start the loan forgiveness process

1. Gather and document “eligible payroll costs” as well as “eligible non-payroll costs”.

  • Define whether a Covered Period or Alternative Payroll Covered Period of 8 or 24 weeks applies.
    • Covered Period: The Covered Period can be either: (i) a 24-week (168-day) period beginning the date the PPP loan is disbursed or (ii) if you received your PPP loan before June 5, 2020, you may elect to use an 8-week (56-day) period beginning the date the PPP loan is disbursed.
      • Example: If you are using a 24-week Covered Period and received your PPP loan proceeds on April 20, 2020, the first day of the Covered Period is April 20, 2020 and the last day of the Covered Period is October 4, 2020.
    • Alternative Payroll Covered Period: If you are an employer with a biweekly (or more frequent) payroll, you may elect that your applicable 24-week (156-day) or 8-week (56-day) covered period begin on the first day of the next payment cycle after your PPP loan is disbursed for the purpose of calculating your eligible payroll costs.
      • Example: If you are using a 24-week (168-day) Alternative Payroll Covered Period and receive your PPP loan on April 20, 2020 and the first day of the next payment cycle following the disbursement of the PPP loan is April 26, 2020, the first day of the Alternative Payroll Covered Period is April 26, 2020 and the last day of the Alternative Payroll Covered Period is October 10, 2020.
    • In no event may the Covered Period or the Alternative Payroll Covered Period may extend beyond December 31, 2020.

    • Remember that you will be able to start your application as soon as you have used all the funds of your PPP loan, without having to wait for the 24-week covered period to come to an end.

  • Define the eligible payroll costs (at least 60% of your loan must be used for eligible payroll costs):
    • Cash compensation ($100,000 maximum gross earnings per employee):
      • Gross wages
      • Gross tips
      • Gross commissions
      • Paid vacation (vacation; family, medical or sick leave; and layoff or severance benefits)
    • Non-cash compensation:
      • Health insurance plans
      • Retirement plans
      • State and federal taxes

  • Define eligible non-payroll costs (cannot exceed 40% of the PPP loan amount):
    • Interest on commercial mortgage loans
    • Rent
    • Utilities

    It is important to note that eligible non-payroll costs must be incurred under agreements in effect before February 15, 2020.

  • Identify (i) the eligible payroll costs that were incurred during the Covered Period or the Alternative Payroll Covered Period, as elected, and (ii) the eligible non-payroll costs that were incurred during the Covered Period.

  • If you used more than 60% of the loan funds in eligible payroll costs, you will have to disclose the entire amount in your forgiveness application.

2. Make sure that you comply with the other requirements established by the SBA to receive the forgiveness of the PPP loan, which are related to the reduction of wages and the maintenance of the employee headcount. For more information regarding these requirements access the Program’s official page.

Step 2

Prepare to apply for forgiveness

If your loan is of $50,000 or less -

To verify the required documents that you have to submit you may access page 3 of the PPP Loan Forgiveness Application Form 3508S Instructions for Borrowers.

If you loan is of $50,000 or less, but in conjunction with your affiliates you have PPP loans in an aggregate amount of $2 million or more, you will not be eligible to use Form 3508S.

If your loan is more than $50,000 – You can use the SBA’s Checklist for using SBA Form 3508EZ to make sure which of the following forms applies:

We recommend carefully reviewing the Checklist for using SBA Form 3508EZ to determine if you qualify to complete the 3508EZ form; it is a much simpler form than Form 3508.

If you must use Form 3508, it is important that you gather the data from your payroll which has been defined as necessary to complete the PPP Schedule A Worksheet and the PPP Schedule A. Additionally, you can verify the required documents per applicable costs detailed on step #1 on page 6 of the “ Loan Forgiveness Application Instructions for Borrower”.

It’s important to mention that you don’t have to complete or submit the physical forms, since the process will be completed digitally through the portal.

Step 3

Submit your application for forgiveness through our online portal

  • You will receive an email on the established date with the link to access the digital forgiveness platform, your username and a link to assign your password. With this information you will be able to log in to the platform.
  • We have created a digital platform through which you can submit the required documentation, complete the process and sign the application electronically.
  • We will verify the documentation and validate the calculations you submitted. We will notify you via email if we need additional data which you will be required to provide through the digital platform.
    • In order for us to process your application, we must have evidence that your business was operating by February 15, 2020. For this purpose, please submit a Payroll Record or a similar document that covers the period of February 15, 2020.
      • If you are self-employed and have no employees, you must submit a 2020 invoice, a bank statement or a payroll record. These documents will serve to verify that your business was operating on or around February 15, 2020.
      • If you are self-employed, an independent contractor and/or a sole proprietor (without employees) You must provide documents evidencing your net profit for the year 2019 and the use of your PPP loan funds. The required documents are:

        A copy of the 2019 Income Tax Return.

        Canceled checks and/or account statements showing that the funds were 100% used for payroll; or 60% for payroll and 40% for eligible non-payroll costs (commercial mortgage loan interest, rent, and/or utilities).

  • Once your application is completed and we have confirmed that it includes all the required documentation, we will send it to the SBA for authorization.
  • You will be able to monitor your application's progress and the SBA's decision through the digital platform.

Access the printable version here.