AUGUSTA - The Board of Directors of the Finance Authority of Maine (FAME) today unanimously voted to approve two programs to aid businesses in Federal Emergency Management Agency (FEMA)-designated disaster areas that have been negatively affected by recent flooding as a result of the intense spring storm. Effective immediately, FAME will provide lower cost, short-term bridge financing to affected businesses via its direct loan and its commercial loan insurance programs.
"We are pleased to assist Maine businesses during this difficult time as they strive to weather the storm in the face of Mother Nature's fury," stated FAME Board Chair Joyce Maker.
First, FAME will offer direct loans through its Economic Recovery Loan Program. FAME is reducing its usual interest rate by 4% to 2% below the Prime Lending Rate on one-year loans of $75,000 or less (no principal repayment in the first year).
Second, FAME will make available commercial loan insurance both in the traditional manner and also via its innovative OnLine Answer (OLA) Program. "OLA is a faster, easier, and lower cost way for lenders to apply for loan insurance," stated FAME CEO John Witherspoon. "A lender simply completes an application on FAME's web site and receives a decision and all required FAME paperwork within minutes," Witherspoon noted. Typically, the OLA Program provides lenders with up to 60% pro rata loan insurance, up to a maximum FAME exposure of $250,000. Through June 30, 2007, however, FAME will be increasing the insured percentage to 75% on loans of $100,000 or less to affected businesses (no required principal reductions through maturity). Also, the normal 1% initial insurance fee will be reduced to .5% and the terms of these loans will be restricted to a maximum of six months. A financial institution must sign up with FAME in order to participate in the OLA Program.
"Through these two flexible options, we are doing our part to assist Maine businesses as they cope with the challenges wrought by the recent storm," stated Witherspoon.
