Many of our small business and non-profit customers have asked us for help navigating the multiplicity of federal and state relief and assistance programs established as part of the Coronavirus Aid, Relief and Economic Security ("CARES") Act of 2020.
We have developed this quick reference summary based on our current understanding of these programs, many of which are not yet defined by regulation and are not yet active. The rules implementing these programs are incredibly fluid. This is not a complete description of these programs or their eligibility requirements.
Supporting Our Customers
We encourage all commercial real estate and non-profit customers to contact a commercial lender directly if they wish to discuss additional financing and liquidity options, including lines of credit on unencumbered properties or additional lines of credit or mortgages on low-leverage properties. For those small businesses with whom we only have deposit relationships, please feel free to contact one of our lenders, branch managers, or Specialized Deposit Group relationship managers.
SBA Economic Injury Disaster Loans (EIDL) Program
- Who: All small businesses (under 500 employees) and non-profits - additional SBA restrictions may apply
- When: Available Now
- What: EIDL can provide up to $2 million of financial assistance (actual loan amounts are based on amount of economic injury) to small businesses or private, non-profit organizations that suffer substantial economic injury as a result of the declared disaster, regardless of whether the applicant sustained physical damage.
- How: Applicants must apply directly with the SBA online
- Hingham's Role: This is a direct application program with the SBA and is not coordinated with an SBA partner bank.
SBA "Paycheck Protection" Loan Program
The CARES Act established the "Paycheck Protection" Loan Program under the so-called SBA 7(A) Program.
- Who: All small businesses (under 500 employees) and non-profits - additional SBA restrictions may apply. This program also covers individuals operating under sole proprietorships, independent contractors and self-employed individuals (subject to certain additional documentation requirements).
- When: Hingham is no longer accepting applications for this program.
- What: The maximum loan amount is $10 million under the SBA rules, but Hingham may establish low limits by customer. The formula for determining the size of the loan for a particular borrower is tied to payroll costs (broadly defined) incurred by the business. Allowable uses of the loan funds include payroll costs;continuation of healthcare benefits during paid sick, medical or family leave; insurance premiums; mortgage interest payments, rent and utility payments; and interest on other existing debt obligations. Certain amounts may be forgivable if proceeds are used to maintain employment.
Federal Reserve Main Street Business Lending Program
The CARES Act also directed the Federal Reserve to establish a new Main Street Business Lending program or facility. Based on our review of availability information, Hingham will not be participating in this program.