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V O L . X X V I N O. V I I A P R I L 6 , 2 0 2 0 20 B A N K I N G / F I N A N C E / I N S U R A N C E F O C U S I t was March 12, and the state had just announced Maine's first COVID-19 case. As the business community began to focus on what impact the coronavirus pandemic could have, Auburn Mayor Jason Levesque felt his city had to make a move. An immediate one. Like many cities in Maine, Auburn was gaining traction downtown, some- thing the pandemic could halt. "at weekend I was looking at what we could do as a city," he says. Six days later, Auburn City Council approved his plan for no-interest bridge loans to businesses to help them stay afloat until state and federal relief is available. e money comes from the city's Community Development Block Grant fund, and the loans are $2,500 a pop for payroll, rent or mortgage. In just four days, nine loans had been issued to local businesses. Across Maine, as Congress worked to pass the $2.2 trillion stimulus bill, those behind the Maine programs couldn't wait. Businesses needed help immediately to hold on until that help came. Elsewhere, Brunswick Development Corp. had a similar idea. It created an Emergency Loan Fund that pro- vided $100,000 for $5,000 two-year term loans, with payments deferred for 12 months to businesses affected by the virus. e same week Auburn's program began, the Legislature approved an emergency package that provides $15 million in loans guaranteed by the Finance Authority of Maine. Levesque says in Auburn the aim was to get money immediately to businesses, particularly the city's 33 restaurants. "ese are businesses that had to meet the next payroll," he says. "It's to keep the money flowing. ese busi- nesses are the heartbeat of the city." FAME triple shot FAME is busy administering three programs that provide fast money to businesses: Small Business Administration loans that provide interim funding up to $100,000 for businesses that are applying for SBA disaster loans. Relief Loan Insurance for Lenders, which offers instant approval to lenders submitting loans for busi- nesses affected by COVID-19. Relief Business Direct Loan Program for borrowers, offering up to $50,000 with discounts on inter- est rates and fees. Bruce Wagner, CEO of FAME, says the first step for businesses seeking one of the loans is to talk to their lender. As with Auburn and Brunswick's pro- grams, the goal is to provide quick relief. With the SBA interim loan, a business that gets SBA approval doc- uments it to FAME, which advances up to $100,000 while the SBA loan is processed. e other two programs are a guar- antee to lenders, and a direct loan pro- gram for those who aren't approved. Lenders know their customers e loan insurance for lenders is set up to happen fast — they can call the online approval system and get an instant decision. If it's not approved at the 75% guarantee, it drops to the 50% level. FAME figures lenders are close enough to their commercial customers to know whether the loans are worth the risk. "We're somewhat assuming they've had a relationship with the borrower and they're in a position to judge the likeli- hood and ability to repay," Wagner says. e third program is for those who don't qualify for loans with their lender. e $15 million funding the pro- grams is a good part of the organization's reserve, Wagner says. Despite the uncertainty of what will happen to businesses and the amount of money involved, there's no question the programs had to happen — and happen fast, he says. "Our practice day-to-day is to loan money, and it's really on the most risky loans out there," Wagner says. "at's what FAME should be doing. If we're not taking risk for public benefit, FAME shouldn't exist." P H O T O / T I M G R E E N WAY Financial LIFEBOATS A range of programs are launched as coronavirus swamps Maine businesses B y M a u r e e n M i l l i k e n F O C U S These are businesses that had to meet the next payroll. It's to keep the money flowing. These businesses are the heartbeat of the city. — Jason Levesque Auburn mayor Jason Levesque Jason Levesque, mayor , mayor of of Auburn Auburn, in the Auburn , in the Auburn City Council Chambers. City Council Chambers. Auburn is one of the cities Auburn is one of the cities that has responded to the that has responded to the COVID-19 crisis by offering COVID-19 crisis by offering small business loans. small business loans.

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