Thrive Maine Loan Program – Application Period Opens October 4!

By Merrill Barter September 29, 2022

This is a follow-up to the previous article (here) describing the “Thrive Maine” loan program, the funding of which was set in motion by the American Rescue Plan Act passed a year and a half ago.

The Finance Authority of Maine (FAME) is administering a program under which a total of $58 million in forgivable loans will be issued to eligible Maine businesses and nonprofit organizations that meet specific criteria. There will be two application periods, each awarding a total of $29 million in loans. Applicants may participate in both rounds.

The application period for the first round of loans begins at 9:00 a.m. on Tuesday, October 4, and closes on December 3. The application period for the second round of loans will open in early 2023.

Loans will be made on a first come, first served basis to eligible applicants who demonstrate COVID-related negative economic impact in one of three categories:

• • Loss of EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)
  • Expenses incurred for the purchase and installation of materials, systems and/or software to ensure the safety of employees and patrons, such as PPE, remote office software, HVAC systems, plastic partitions, temperature scanners, etc.
  • Increased Capital Project Costs

Applicants can apply for a loan under only one of the above categories during an application period. An applicant that participates in both rounds can apply under the same or different categories.

There are additional criteria, but at the core, each loan will be between $10,000 and $2,000,000, and eligible for forgiveness at a rate of 25% over each of 4 years. Because the program is designed to help current businesses that are predominantly based in Maine, subsequent business closures or relocations may result in successful applicants’ remaining balances being categorized as non-forgivable, subject to repayment with 3% interest.

A significant amount of information will be required for the applications. The following will be required for all categories:

• • Unique Entity Identifier (UEI). If an applicant does not have a UEI, it can still apply as long as a UEI has been applied for and is in “pending” status. The applicant must submit a screen shot of the UEI application page showing the “pending” status with the Thrive application. If the loan application is approved, it will be on “hold” status until the UEI is provided to FAME by the applicant. (It is solely the applicant’s responsibility to initiate the provision of the UEI under this scenario, and they must do so by December 3 or the funds otherwise allocated to that applicant will be returned to the pool of funds available to all applicants in the second round of loans.)
  • Bank account information. Loans will be direct-deposited.
  • Income statements and balance sheets for 2019 through 2021, and for year-to-date 2022.
  • Tax returns for 2019 and 2020 (2021 if available and being used in the EBITDA category).
  • The amounts of federal and state funds received and forgiven, such as PPP loans.
  • A detailed description of how the business was negatively impacted by the pandemic. What caused the loss in EBITDA, created the need for the additional expenses or capital project and caused the project’s costs to increase?

Below is information that will be required for each specific category:

Loss of EBITDA:

• • If 2019 was an extraordinary year and EBITDA was unusually high, then 2018 can be used as the base year to compute the loss of EBITDA. An income statement, balance sheet and tax return must be provided for 2018. In addition, a detailed explanation must be provided regarding why 2018 is being used as the base year.
  • Templates will be included within the application, and applicants are strongly encouraged to use these.

Expenses Incurred:

• • Each expense claimed must be described in detail. Why was it necessary?
  • A receipt must be provided for every expense claimed.
  • Expenses for which there’s a commitment to pay by 12/31/2024 can be included. A signed contract and detailed explanation must be provided.
  • A template for recording the above information will be included in the application.

Increased Capital Project Costs:

• • Detailed substantiation for the increase in the project costs must be provided. This could include a copy of the original and final quotes, proof for all amounts paid, etc.
  • A template will be included in the application that must be completed.

It will be crucial to provide all of the information required with the application. Include as much detail as possible – more is better. FAME will not accept additional information once an application is submitted, other than the follow-up of an actual UEI for those applicants whose UEI was in “pending” status at the time of the Thrive application.

The Thrive Maine page on the FAME website (here) contains extensive information that goes beyond what this article provides. That material includes a very informative FAQ section that explains logistics and details that will help readers properly complete their applications. A sample application and the templates mentioned above will be available on the site on Thursday, September 29. Access to the application portal will be on this site on October 4.

The application process for the Thrive loan program requires the accumulation of a significant amount of information, but the benefits could be well worth the time invested. If you are unsure about whether your eligible business or nonprofit will qualify for a loan, we encourage you to apply, as there is no downside to doing so.

For more information, please contact Merrill Barter or your BNN advisor at 800.244.7444.