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Covid-19: FAME & SBA Loans To Help Businesses and Individuals

March 20, 2020
A huge thank you to Tony Cameron and the Maine Tourism Association and Tony Cameron for this concise explanation of the loan programs.  The Chamber was going to write a similar piece, but this is so complete we are borrowing it for our blog.  Thank you Tony and Alison.  

 

FAME, SBA, AND MAINE LENDERS OFFER SPECIAL FINANCING FOR BUSINESSES AFFECTED BY COVID-19

Maine Tourism Association CEO Tony Cameron, and COO Alison Sucy, participated in a conference call with FAME, the Maine Credit Union League, and the Maine Bankers Association Thursday afternoon. FAME is getting its resources live online and the application process will begin tomorrow. Please check the website for more information at www.FAMEmaine.com.  

FAME and participating lenders will make special terms available to Maine-based businesses that have experienced interruption or hardship due to COVID-19. Various benefits include: loans up to $50,000 offered at reduced interest rates; interest-only payments; up to 75% pro-rata loan insurance on loans up to $100,000; interim financing in conjunction with the SBA wherein FAME makes loan proceeds available while approved SBA borrowers await federal funding.

The FAME COVID-19 business response programs are outlined in greater detail at www.FAMEmaine.com. Summaries are 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. 

 

COVID-19 Relief Interim SBA Finance Loan Program: The SBA has initiated their disaster relief loan into “designated” disaster areas, and Maine recently has been designated as such an area. FAME will provide interim direct loan funding up to $100,000 since, following approval from the SBA, additional documentation from the borrower may be required prior to full disbursement of the SBA loan. FAME will obtain an assignment of the loan proceeds from the SBA and pre-fund the loan so the money is available to Maine businesses sooner. 

 

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 and a decreased interest rate and decreased fee schedule for Maine-based businesses that experience interruption or hardship due to COVID-19. 

 

Funds for the above programs will be limited. FAME anticipates setting aside up to $10 million of its reserves for the loan insurance program and up to $5 million for the direct loan program. FAME estimates that the above programs could help to provide $15 million in economic support for approximately 300 small- to mid-sized businesses in the state. FAME will make 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.

 

COVID-19 Relief Consumer Loan Program is a new consumer loan guarantee program administered by FAME in partnership with Maine lending institutions recently enacted by the legislature’s omnibus legislation related to COVID-19. It will provide a limited number of no- to low-interest consumer loans through a loan guarantee program involving Maine’s banks, credit unions, and FAME. Interested borrowers should first contact their local bank or credit union to see if the lender is offering this program and to apply. Loans of up to $5,000 (minus any unemployment benefits received by borrower) may be available and up to three loans to any one borrower can be applied for, one per each 30-day period.

 

SBA - Economic Impact Disaster Loans 

Applications and information: www.sba.gov/disaster and toll-free line for questions: 1-800-659-2955. 

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