FAME extends COVID-19 relief programs for small businesses by six months
Photo / Maureen Milliken
The Finance Authority of Maine has extended its COVID-19 business relief loan and insurance programs through March 31.
The Finance Authority of Maine has extended availability of its COVID-19 business relief programs by another six months as the pandemic continues.
Business relief programs related to loan insurance and direct loans, launched in mid-March, were extended through March 31, 2021, at the Thursday meeting of FAME's board.
The extension is because of "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," Jay Violette, FAME board chair, said in a news release.
In March, FAME partnered with Maine lenders to offer limited-time loans and loan insurance to eligible businesses affected by COVID-19. Feedback from customer and lenders on how the programs could be improved and expanded prompted some modifications, the release said.
The offerings now also include relief refinancing for existing loans, as well as 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.
Through Aug. 31, FAME committed or approved 33 COVID-19 Relief Loan Insurance for Lenders loans, totaling $1.1 million in FAME exposure. It has funded or approved 78 COVID-19 Business Direct Loans totaling $2.9 million.
Money for the programs is still available, but the overall total is limited. Up to $10 million of FAME's reserves were set aside for the loan insurance program, and about $8.9 million is still available. Up to $5 million was put aside for the direct loan program, and about $2 million is still available.
The programs include the following.
COVID-19 Relief Loan Insurance for Lenders: In partnership with lending institutions, FAME will approve any Online Assistance loan submitted electronically and deemed “COVID-19” at a 50% insurance rate. Some will be eligible using FAME's current standards (and be assessed decreased fees) for 75% coverage. Lending partners share the risk with FAME and may get approval for the loan in an expedited manner. Those getting the benefit apply through lenders that are taking part in the program. Maximum FAME exposure is $250,000 per borrower.
COVID-19 Relief Refinance of Existing Lender Debt Program: Allows Maine banks and credit unions to get 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 and decreased fee schedule for Maine-based businesses that experience interruption or hardship due to COVID-19.
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, FAME officials said.
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.
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