COVID-19 Relief Refinance of Existing Lender Debt Program

The COVID-19 Relief Refinance of Existing Lender Debt Program is a commercial loan insurance program for Maine lenders (banks and credit unions). The Finance Authority of Maine will make special terms available for refinancing existing business loan debt not currently insured by FAME. Borrowers must have experienced interruption or hardship due to COVID-19. These special terms are available only on applications submitted via FAME’s traditional Commercial Loan Insurance Application. This product will not be available through Online Answer (OLA).  These loans are eligible for pro-rata insurance coverage of up to 50%.

Eligibility

Provided to the Lender for existing loans to a Maine-based businesses experiencing interruption or hardship due to COVID-19.

Loan Amount/Exposure

Refinance of Existing Lender Debt: up to 50% insurance of a currently uninsured lender’s loan on a pro-rata basis only. Must be submitted through FAME’s paper application process.

  • Adequate cash flow to service debt in 2019  (in excess of 1.0 DSC ratio)
  • Appropriate capitalization
  • Business was viable and will be viable on an ongoing basis
  • Pass credits that were effected by COVID
  • Best interest of the borrower, should result in a reduction in debt service
  • Reduce commitment fee from 1% to .50% which can be capitalized into the loan.

Security

First lien position on collateral securing these loans, with adequate collateral coverage

Guarantees

Unlimited personal guarantees of the business principals.

Fees

1% guarantee fee year-one, may be financed with the loan. Commitment fee reduced from 1% to 0.5%.

Application

The Lender submits the application via the FAME traditional application process (see below), checking the “COVID-19 Relief” box. The lender has the option to apply for up to 50% insurance.

Lender shall obtain documentation from borrower outlining COVID-19 effects on their business operations.

All of the following documents must be completed and returned to FAME in order to complete the traditional loan insurance application process:

  • Loan Insurance Application
  • Personal Financial Statement (of all principal owners)
  • Environmental Questionnaire
  • Employment Plan (if business employs more than ten (10) employees)
  • Business Plan
  • Department of Environmental Protection Assessment Application (if loan amount is equal to or greater than $1,000,000)

Application Downloads

For best results, please download .pdf forms locally, then open and complete them with Adobe Acrobat. If you don’t have Acrobat, you can download a free version of Adobe Acrobat Reader here. Save and print your completed forms, then mail to FAME.

Contact

FAME