FAME’s Online Answer (OLA) platform is a secure web application that makes it easy for financial institutions to apply and be approved for pro-rata and leveraged insurance. By entering a limited amount of data, lenders can submit an application and receive a decision in seconds. OLA is provided by FAME to financial institutions that have signed both the master Loan Insurance Agreement and the Addendum to Loan Insurance Agreement with FAME. For commercial loan insurance (CLI) over $1,500,000, FAME provides a traditional application process.
To learn more about how the OLA platform works, view the OLA User Guide.
Pro-rata and leveraged insurance for term loans are available in one-, three-, and five-year fee options. Pro-rata and leveraged insurance for line-of-credit loans are available in one- and three-year fee options. Information on how FAME assesses the eligibility of a business or project can be found in Commercial Loan Insurance Guidelines.
Any business or project for any such business that is located in the state of Maine is eligible, except for businesses or uses as follows:
- Religious or fraternal organizations
- Gambling or adult entertainment facilities
- Residential housing
- Investment real estate (50% or more non-owner occupied)
- Personal, family or household expenses
Insurance Available Maximum
- Pro-rata term and line-of-credit loans:
- 75% maximum insurance up to $1,500,000 FAME exposure.
- 60% maximum insurance for startups (businesses open less than one year) up to $1,000,000 FAME exposure.
- Use of projections in cash flow analysis limits availability to $1,000,000 FAME exposure.
- Pro-rata refinance of existing debt: 40% insurance on up to $1,000,000 FAME exposure. See Guidelines for Refinancing Existing Lender Debt. (Leveraged insurance is not available for refinancing existing debt.)
- Leveraged term loans: Up to 25% insurance on up to $500,000 FAME exposure.
- Leveraged lines-of-credit loans: Up to 20% insurance on up to $500,000 FAME exposure.
FAME’s aggregate exposure per related entity (borrower/guarantor) in OLA is $1,500,000. This can be a combination of pro-rata and leveraged insurance with a $500,000 limit on leveraged insurance.
Interest Rate and Term
Determined by lender. (Term should not exceed useful life of assets financed or serving as collateral.)
All types of collateral are eligible, subject to review and acceptance by FAME. Loans predominantly secured by accounts receivable and/or inventory require first-priority lien on said assets.
Any individual or entity that owns 20% or more of the borrower, or owns 5% or more of the borrower and receives substantial income from the borrower, must guarantee the loan. All loans shall be guaranteed by owners of at least 51% of the borrower in aggregate, except for nonprofit borrowers and borrowers owned by 20 or more shareholders. Exceptions to this policy must be approved by the FAME board.
Underwriting of OLA loans is done by a computerized scoring system, based on the information provided in the application process. The formula considers: global cash flow, collateral coverage, credit score, and public benefit, all as determined by FAME.
Special Credit Considerations:
Refinancing Existing Debt, Floor Plans, Construction Loans
Loan insurance for refinancing of seller debt, floor plan lending, and construction lending has special credit considerations and limitations. Please contact a FAME commercial loan officer for additional details.
- Environmental Questionnaire: if business real estate is collateral (to be kept in lender’s file)
- Employment Plan: if business currently has more than 10 employees (to be submitted to FAME with insurance authorization and premium after approval)