In an effort to continue supporting its customers with their financing needs during the continuing COVID-19 pandemic, the Finance Authority of Maine (FAME) has approved extending by six months the availability of its special COVID-19 business relief programs.
“Due to the lingering economic effects of the pandemic, as well as continued federal, state and regulatory economic stimulus programs, lender partner feedback, and our belief that credit impacts on borrowers are likely to manifest themselves in the coming six months, we have approved an extension of our special COVID relief programs through March 31, 2021,” stated Jay Violette, FAME board chair.
At its September17 meeting, FAME’s board of directors voted to extend by six months the availability of its business relief programs related to loan insurance and direct loans. These programs have limited funding and will sunset on March 31, 2021.
In March of this year, FAME announced that it was partnering with local Maine lenders to offer special, limited-time loans and loan insurance to eligible Maine businesses affected by COVID-19. Since then, FAME has maintained close communication with its lending partners and business customers and received feedback in relation to its product offerings, including suggestions on how it could improve and expand them to further help Maine businesses. In June some modifications were made to the programs based on customer feedback.
FAME and participating lenders have made special terms available to Maine-based businesses that have experienced interruption or hardship due to COVID-19. Benefits include: loans up to $50,000 offered at reduced interest rates; interest-only payments; and up to 75% pro-rata loan insurance on loans up to $250,000.
The FAME COVID-19 business response programs are outlined in greater detail at FAME’s website, www.FAMEmaine.com, and in general below:
- COVID-19 Relief Loan Insurance for Lenders: In partnership with lending institutions, FAME will approve ANY Online Assistance (OLA) loan submitted electronically and deemed “COVID-19” at a 50% insurance rate. Some will be eligible using our current standards (and be assessed decreased fees) for 75% coverage. Lending partners will share the risk with FAME and may obtain approval for their loan in an expedited manner. Interested borrowers should contact their local bank or credit union first to see if the lender is offering this program and to apply. Maximum FAME exposure of $250,000 per borrower.
- COVID-19 Relief Refinance of Existing Lender Debt Program: Allows Maine lenders (banks and credit unions) to receive up to 50% pro-rata commercial loan insurance on existing debt that is not currently insured by FAME.
- COVID-19 Relief Business Direct Loan Program: To be utilized when a borrower cannot obtain a loan or OLA from a lending partner. Offers loans up to $50,000 per loan/borrower and a reduced interest rate (WSJ Prime minus 1%) and decreased fee schedule for Maine-based businesses that experience interruption or hardship due to COVID-19.
Through August 31, FAME has committed and/or approved 33 COVID-19 Relief Loan Insurance for Lenders loans totaling $1.1 million in FAME exposure. During that same period, FAME has funded and/or approved 78 COVID-19 Business Direct Loans totaling $2.9 million.
Funds for the above programs are limited. FAME has set aside up to $10 million of its reserves for the loan insurance program, which still has approximately $8.9 million available, and up to $5 million for the direct loan program, which has about $2 million in available funds remaining. FAME makes every effort to work with borrowers on special accommodations for their loans, especially during this challenging time.
FAME’s Commercial Loan Insurance Program insures a portion of a loan to a business made by a participating financial institution or investment firm. For a business, it may mean the difference between obtaining a loan or never getting the opportunity to start a business.
The FAME Direct Loan offers reduced interest rate loans to businesses that may not have been able to secure financing through traditional lenders. This program helps new or existing business with flexible gap financing directly from FAME.
The Finance Authority of Maine (FAME) is a quasi-independent state agency that provides innovative financial solutions to help Maine citizens pursue business and educational opportunities. FAME helps to lead the creation of good paying jobs for Maine citizens by working at the nexus between economic and workforce development. To learn more about FAME, please visit www.famemaine.com.