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Tim Bombard
Chief Lending Officer, East Cambridge Savings Bank
Age: 59
Industry experience: 37 years
East Cambridge Savings Bank Chief Lending Officer Tim Bombard sees opportunity in the Main Street Lending Program where many other financial institutions don’t. One of the first local banks to announce it has joined, ECSB wants to give local businesses the option to access the program through a community bank, Bombard said.
Administered by the Federal Reserve Bank of Boston, the Main Street Lending Program offers five-year loans to small and mid-sized companies that were in sound financial condition before the start of the coronavirus pandemic and is intended to continue offering credit to firms once the Paycheck Protection Program expires. To participate, businesses must have either 15,000 employees or fewer or 2019 annual revenues of $5 billion or less. However, the program has so far attracted few banks and credit unions to take part.
Q: Why did East Cambridge Savings Bank decide to participate in the Main Street Lending Program?
A: We’re here in this community. We’re offering to help some of the businesses that weren’t necessarily eligible for the PPP program. These are viable, small to middle–market companies right here in our market area that we saw as an opportunity. It’s a great program that the Feds put together. Let’s see if we can help other businesses out.
At first when they came out with it, it seemed like a stretch for us. The minimum loan amount was relatively high. Then the Fed started finding ways to adapt to the needs of those small to middle–market companies, so they lowered it to $500,000 and then finally settled on $250,000. Our bank is going to be focusing on the Main Street New Loan Facility [offering loans between $250,000 and $10 million, one of three facilities in the program]. They gave it a more attractive payment plan by deferring principal for a couple years and interest for a year, and the loan term is out to 5 years. They’ve really done a nice job of structuring this program.
You don’t usually have your regulator as your partner, but it’s one thing we have here. These are all risk participations: 5 percent by us and 95 percent by the Federal Reserve. We work great with the Boston Federal Reserve. They’re in here every year, and they know our underwriting, they know our risk tolerances.
Q: What businesses does East Cambridge Savings Bank expect to participate?
A: We’re going to be sticking to companies in our market area. I’ve been contacted by several companies outside of the area that heard about East Cambridge Savings Bank’s participation in the program. But we’re here in this community. We stretch from Waltham out to Lynn, and that’s where we’ll be making the program available.
There are going to be companies this will make sense for and others that it won’t. We want businesses to know that this program is going to be available to them through East Cambridge and the Federal Reserve. If a lot of companies don’t call, it may not be a bad thing. It could mean that they have access to funding in other ways.
We’re a mutual bank with just about $1.2 billion in assets, and we’ve been around since 1865. We’ve been in this market providing home mortgages and small business loans for years, and we’re good at it. There are commercial banks that have been out there financing some of the middle–market companies. For those businesses that would bank here, the Main Street Lending Program is another tool, another financing option for them to have.
Q: Why do you think the program is off to a slow start?
A: I think the Fed did a thoughtful job of laying this out. I know they’ve been spending a lot of time making sure the forms, the special purpose vehicle and other things were in place before it rolled out. I don’t think a slow start to this is a bad thing. A lot of the companies in our market area have other options for financing. In this area in Boston proper and Eastern Massachusetts, we are lucky to be in a still relevant, still robust economy. There may not be a need for the program at this time.
If we do get into different waves with the coronavirus, and the governor decides we have to cut things back or slow things down, it’s going to stop business earnings from growing or at least starting back up again. Maybe that’s when we’ll start getting more calls on the program.
Q: What other opportunities have you seen for business lending?
A: There are still capital needs for some of these businesses. We’re financing. We’re still offering term loans for purchase of equipment, and we’re still renewing lines of credit for working capital. A lot of the service industries have slowed down, depending on where they fall in the state’s different reopening phases. But there’s not one business owner that I’ve talked to that is giving up. There’s not one that is throwing the towel in. They’re all looking to get through the economic times we’re in right now and looking for the banks to be partners with them.
Interest rates help. Thanks to the lower interest rates, it’s helping financing costs to be manageable. Certainly, on the commercial real estate side, we’re still involved with a lot of projects that were maturing that are being refinanced. It’s a great time to be a debtor. There’s a lot of refinancing activity taking place.
Bombard’s Five Favorite Summer Activities
- Getting out on the water with friends and family
- Spending time in upstate Vermont
- Reading a good book in a hammock
- Going to Fenway Park
- Manning the backyard grill
