Thrive Maine will offer $58 million in forgivable loans for Maine small businesses Grow Maine will offer $62 million in direct loans, commercial loan insurance, and equity investments for Maine small businesses
AUGUSTA– Governor Janet Mills recently announced a $120 million initiative to support Maine small businesses. The initiative features two separate programs: Thrive Maine and Grow Maine. The programs aremade possible by recovery funding under the American Rescue Plan Act of 2021 (ARPA). The state funds for the Thrive Maine initiative were appropriated to FAME by the Legislature and Governor Mills pursuant to L.D. 1733, the Maine Jobs & Recovery Plan. The federal funds for the Grow Maine initiative are made possible by the State Small Business Credit Initiative (SSBCI) passed by Congress.
Thrive Maine, a program administered by the Finance Authority of Maine (FAME), will provide up to $2 million in forgivable loans to eligible Maine businesses. The funds will be deployed on a first-come, first-served basis and be forgiven at a rate of 25% per year over a four-year period provided certain conditions are met. A total of $58 million in ARPA funds will be dedicated to this program.
Eligible businesses include Maine businesses with fewer than 500 employees. A business must demonstrate that it has experienced COVID-related negative economic impacts, including loss of revenue; expenses or increased costs incurred; broader economic impacts such as supply chain interruptions and/or “soft cost” increases; and broader economic impacts incurred or to be incurred between March 2021 to present.
The program will offer two separate grant application periods, the first anticipated to begin on or around September 7 and running for a period of sixty days, or until funds are exhausted. Award amounts are determined by the business’s economic loss as a result of the COVID-19 pandemic. Losses for which a business previously received federal and state pandemic relief, such as Paycheck Protection Program (PPP), Economic Injury Disaster Loans (EIDL), or Maine Small Business Grant funding, cannot be re-submitted, however.
“FAME looks forward to administering this program to help support Maine’s small businesses and to move Maine’s economy forward,” said Carlos Mello, Acting CEO at FAME.
Grow Maine, to be administered by FAME in conjunction with various statewide lending partners, will provide up to $62 million of State Small Business Credit Initiative (SSBCI) funding to eligible Maine businesses. SSBCI is a federal program administered by the U.S. Department of the Treasury that was created to strengthen state programs that support private financing to small businesses. Governor Mills has designated FAME to serve as the state agency to accept the allocated funds for the program.
To ensure broad access to capital, FAME is partnering with over thirty intermediary lenders across the state for the Grow Maine program. The lenders are community-based, Community Develop Financial Institutions (CDFIs), and local and municipal economic development lenders that are already partners with FAME’s direct lending programs. Funding will be available through FAME and its intermediary partners via loan guaranties, direct loans, and equity capital.
Direct loans will be deployed through Community Development Financial Institutions (CDFIs); the state’s various Economic Development Districts (EDDs); and other local agencies that participate in FAME’s Regional Economic Development Revolving Loan Program (REDRLP). Loans up to $5 million will be available (not to exceed $20 million per project) and interest rates will be set by the participating lending institution. Participating agencies will be able to retain the funds and use them after the loans are paid back to relend into these communities so as to prolong their beneficial impact.
The commercial loan insurance portion will be deployed through FAME’s existing OnLine Answer (OLA) portal in partnership with Maine banks, savings institutions, credit unions, and alternative commercial lenders. The lending institutions will expand to include CDFIs, EDDs, and REDRLP participants. Up to 80% commercial loan insurance will be available, with a cap of $1.5 million when using OLA. Also, there will be a reduced fee structure and expanded approval limits, with additional incentives for socially and economically disadvantaged individuals, as well as very small businesses (fewer than ten employees). Commitment fees will be waived on all products, as well.
Equity investments will be deployed through Equity investment partners in the form of business direct investments and fund investments.
“FAME is pleased to partner with various economic development entities across Maine, as well as our commercial lending partners, to help successfully support Maine’s small businesses,” said Carlos Mello, Acting CEO of FAME.
At the end of the ten-year funding cycle for Grow Maine, the state anticipates leveraging ten dollars in private loans and investments for every dollar of SSBCI lending/investment. Upon loan repayment or return on investment, SSBCI capitalization will be retained by originating lenders or state venture funds as permanent capitalization for ongoing and future economic development purpose lending and investment.
For more information about the Grow Maine programs, including eligibility details and program applications, please visit www.famemaine.com/grow. Applications are anticipated to be available in early September.