The headquarters of the Federal Reserve Bank of Boston. Photo Courtesy of Fox-orian / CC BY-SA 3.0

East Cambridge Savings Bank is among the first Massachusetts-based community banks to announce plans to participate in the Main Street Lending Program.

Authorized by the CARES Act and administered by the Federal Reserve Bank of Boston, the Main Street Lending Program was created to assist small- to mid-sized businesses that are in sound financial condition but have been negatively impacted by the COVID-19 pandemic and associated closures. The program is meant to help eligible businesses meet working capital expenses including, payroll cost, rent, utilities and mortgage obligations.

“The Main Street Lending Program enables us to work with businesses who might think they need a bigger or regional bank to meet their credit needs,” Tim Bombard, the East Cambridge Savings Bank’s chief lending officer, said in a statement. “We have the expertise and ability to work with borrowers to determine their needs and quickly and efficiently process their loan. Thanks to this partnership with the Federal Reserve, we can deliver this program to local business so they can access the credit they need.”

The Main Street Lending Program offers three options for banks seeking to participate. East Cambridge Savings is participating in the Main Street Lending Program New Loan Facility (MSNLF), which offers loan amounts between $250,000 to $35 million. The other options are the Priority Facility, which offers loans up to $50 million, and the Expanded Facility, which offers loans between $10 million and $300 million.

The lender does the underwriting and determines whether to approve a loan for the business. The Fed will purchase a 95 percent interest in the loan, while the lender retains 5 percent of the loan. Unlike the Paycheck Protection Program, Main Street Lending loans are not forgivable.

“Even as local businesses begin to open their doors and prepare to welcome back customers and clients, the acute economic impact of COVID-19 will be felt for many months to come,” East Cambridge Savings Bank President and CEO Gilda Nogueira said in a statement. “Through this Federal Reserve program and our own lending products and services, our bank has the resources, ability, and willingness to help businesses recover. Our message to local businesses is clear: we are here to help.”