June 2008 Archive

The Board of Directors of the Finance Authority of Maine (FAME) yesterday approved a $500,000 loan from its Economic Recovery Loan Program to SB Acquisition, LLC, dba:  Saunders Brothers (“Saunders Brothers”), for building and energy improvements at its Locke Mills manufacturing facility.  The company, which has an office in Westbrook and another facility in Fryeburg, employs 102 people.   

Saunders Brothers is a wood products firm that began operations in the early 1900s.  The company is a major supplier of wood components, including wooden dowels; pins; turnings; handles; furniture components; and related products.

The company plans to use the money to modernize and improve its Locke Mills facility.  Anticipated projects include installation of a new roof for the main building; the purchase of new equipment; and various energy saving enhancements.

"We are pleased to assist Saunders Brothers in this investment in its future through significant facility and energy enhancements to its Locke Mills facility,” stated FAME’s Acting CEO Beth Bordowitz. 

Saunders Brothers was acquired in late 2007 by SB Acquisition, LLC, whose CEO is Keith Fox, an experienced entrepreneur.  Since then, company ownership has implemented several measures to improve the business, including implementing new management systems; consolidating operations; renovating facilities; and instituting a “lean processing” initiative.

"Saunders Brothers appreciates FAME’s assistance as we strive to modernize our business in the face of increased energy costs and a challenging economy,” stated company CEO Keith Fox.

In approving the loan, the FAME Board determined that the retention of 102 quality jobs in Locke Mills and Fryeburg, most with generous health and retirement benefits, will significantly benefit that area of the state.

FAME Board Chair Joyce Maker stated:  “FAME recognizes the company’s need for capital in order to make necessary improvements during this time of high energy costs and challenging global economic forces.”

The U.S. Department of Education recently announced the Federal Fiscal Year 2008 guarantor default recovery rates in the Federal Family Education Loan Program (FFELP) through April 30, 2008.  The Finance Authority of Maine (FAME) earned the highest recovery rates in the nation for the period of October 1, 2007 through April 30, 2008. 

According to data recently released by the Department, FAME’s guaranty agency recovery rates were 30.02% through April 2008.  FAME led all other guaranty agencies in the nation for this period; by comparison, the national average for agencies was19.14% for this same time-frame.

"We are proud of our high recovery rates, which are well above the national averages.  They demonstrate our commitment to helping Maine borrowers get back on track with their loan payments and improve their credit history” stated FAME’s Acting CEO Beth Bordowitz.  “We are pleased that our ‘GOAL$’ program, which offers comprehensive default prevention and outreach, is working so well.”   

In January, FAME announced the creation of a comprehensive default prevention and outreach program, “GOAL$,” which stands for “Great Opportunities to Achieve Life Success.”

Through “GOAL$,” FAME renewed its commitment to college access, financial literacy, and default prevention by implementing a series of new initiatives such as:  the creation of two new positions, Outreach & Default Prevention Manager and Default Prevention Specialist; expanded programs to assist high-risk borrowers during their grace periods; on-line alternative loan counseling and money management tutorials for students; new financial literacy tools, publications and training; expanded college access, outreach & default prevention content on FAME’s website, www.famemaine.com; and increased college access, outreach & training services to schools throughout Maine.

As part of FAME’s recovery efforts, borrowers who are in default on their Federal Family Education Loans can restore their loans to good standing and, as a result, avoid many of the negative aspects of default such as damaged credit and loss of Title IV aid eligibility.  Benefits of rehabilitation include access to new loans, reinstatement of interest subsidies (where applicable), and access to helpful repayment options like deferment and forbearance.

"FAME believes that all defaulted borrowers deserve a second chance and, through a combination of efforts, including active student outreach and education, FAME provides them with that opportunity,” commented Mary Dyer, FAME’s Default Prevention Specialist.  “Recoveries through loan rehabilitation are at an all-time high nationwide, which is a good trend.”

Nearly 46% of FAME’s total recoveries were resolved through loan rehabilitation, removing the default status from the credit history of such borrowers.

At an outdoor event involving Maine truckers, three state agencies, and various legislators, Governor John E. Baldacci yesterday announced the availability of additional, low-cost energy conservation funds for Maine truckers and other businesses. 

Governor Baldacci spoke outside the State House alongside Larry Sidelinger, owner of Yankee Pride Trucking of Nobleboro; Diana and Lonnie Adams of L&D Trucking in Caribou; representatives of the Finance Authority of Maine (FAME); the Maine Public Utilities Commission (PUC); and the Maine Department of Environmental Protection (DEP); and legislators to announce the availability of additional energy conservation funds to help Maine businesses adapt to current economic challenges, especially increased fuel prices. 

Announcing the coordinated effort by three state agencies, Governor Baldacci stated:  “Energy costs are hurting the entire economy.  Businesses of every size are struggling to account for oil and gas prices that seem to set new records every day.  We need our Maine truckers to stay on the road, and this initiative can help keep them rolling.  This is a terrific example of state agencies working together to get something done for Mainers.”

In view of rapidly increasing energy costs to Maine businesses such as truckers, FAME has enhanced the Energy Conservation Loan Program, which is co-administered by the PUC and FAME, and FAME’s Economic Recovery Loan Program.  Among other things, the funds will allow more truckers to purchase energy-saving pollution control equipment such as auxiliary power units (APUs), as well as bunk heaters.  APUs power the electrical needs of a vehicle that are not related to propulsion, such as climate control for sleeping compartments and keeping engine block heaters powered up.  Bunk heaters are units that provide heat to truckers’ sleeping compartments.  Both APUs and bunk heaters are diesel-powered, but use a fraction of the fuel consumed by an idling engine.  Their use will reduce truck idling and can save a company over $12,000 per year in diesel fuel costs per truck, while also reducing fine particulate matter and greenhouse gas emissions. 

FAME has set aside $1,000,000 for energy conservation loans to provide additional funding for businesses to improve energy efficiency.  Cooperatively administered by FAME and the PUC, the Energy Conservation Loan Program had a maximum loan amount of $35,000.  The PUC will continue to fund all loans that meet the program’s current underwriting standards (projects under $40,000, applicants with fewer than 50 employees or $5,000,000 in sales).  FAME and the PUC have modified program rules to fund larger projects that otherwise could not be pursued under the former loan limit.  With the changes, FAME will fund 90% of a total project, up to a maximum of $250,000, at a fixed interest rate of 3% for those projects that are in excess of $40,000.  Loan terms cannot exceed five years, with a maximum fifteen-year amortization period.

Furthermore, the interest rate on all new Economic Recovery Loan Program loans has been reduced from Prime + 2% to Prime, which currently is set at 5%.  The loans in this program provide subordinate (gap) financing to assist businesses in their efforts to remain viable and/or improve productivity. 

The Maine DEP also is planning to make $100,000 available for truckers to install APUs and “bunk heaters” in order to reduce truck idling.  These funds also will be administered by the PUC.

"During these challenging economic times, especially with soaring energy costs, FAME  believes it’s important to be flexible and responsive with its programs so that Maine businesses may benefit immediately,” stated FAME Acting CEO Beth Bordowitz.

"Over 11 years this program has provided more than $2.7 million to small Maine businesses to make the investments that save energy and money,” said PUC Chairman Sharon M. Reishus. “This expansion of the program, at a time when fuel costs are rising so rapidly, is incredibly timely.  It’s been a pleasure working with the Governor, FAME and the DEP to make it happen.”

"Partnering with the PUC and FAME provides the opportunity to secure additional federal funding to reduce diesel engine idling.  While providing financial relief to truckers by reducing fuel use, this effort fits perfectly with the anti-idling law that was passed in the last legislative session by contributing to healthy air quality,” commented DEP Commissioner David Littell.

FAME has collaborated in recent months with the Governor’s Office of Energy Independence, the PUC, the Department of Environmental Protection, the Department of Economic and Community Development, legislators, and others on matters related to energy conservation.  With these stakeholders, FAME has been exploring alternative methods of financing for businesses, including truckers, to minimize the use of fossil fuel and utilize non-fossil fuel based technologies to reduce costs and increase productivity. 

For more information, including links to a fact sheet and program application, please visit www.famemaine.com; www.maine.gov/mpuc; or www.maine.gov/dep/air.

(Click here for Fact Sheet).