FAME loan program to help businesses Fund would offset tax-reimbursement delay

BANGOR – Businesses experiencing financial hardship because of the Legislature’s decision to delay business equipment tax reimbursements possibly could receive relief from a state-funded loan program.

The Finance Authority of Maine will be shifting $2.5 million from its economic recovery loan program into a loan fund being created to assist businesses experiencing “substantial hardship from delay in the payment” of the tax reimbursements.

FAME currently is undertaking steps to establish what is being called the BETR Loan Program and is capping the amount available at $2.5 million, said Charles Spies, chief executive officer of FAME.

“That’s all we’ll be able to do,” he said Tuesday.

FAME is seeking public comment on a proposed agency rule that would put into place the procedures and fees applicable to borrowers. A public hearing is scheduled for 10:30 a.m. Jan. 16 at FAME’s office in Augusta, and written comments are due by that date.

The interest rate will be fixed at the prime rate plus 2 percent once the loan is granted, Spies said. Currently the prime rate is 41/4 percent, he said.

Loan applications for businesses will be available in early February and must be received at FAME by the beginning of April. FAME then will pool the applications, review them and make whatever loans it can, Spies said.

He said “the logic” behind the loan program is that as soon as businesses receive their business equipment tax reimbursements, the borrowed money would be paid back to FAME and the $2.5 million returned to the economic recovery loan program.

In mid-November, the Legislature approved deferring about $48 million in business equipment tax reimbursements for this fiscal year into the next one, which starts July 1. The deferral was one of many budget-tightening steps taken to bridge a $240 million budget shortfall, and was strenuously fought by businesses and the Maine State Chamber and Business Alliance.

For more information on the proposed loan program, contact Elizabeth L. Bordowitz, general counsel, FAME, P.O. Box 949, 5 Community Drive, Augusta, 04332-0949, or call 623-3263.