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March 12, 2009 Jay Finegan, 287-1445
Rep. Giles Seeks $20 Million Bond to Help Small Businesses Weather Economic Turmoil

AUGUSTA – State Rep. Jayne Crosby Giles made a strong case March 11 for her bill to help small and medium-sized businesses weather the current economic recession. Her legislation, LD 214, would authorize a General Fund bond issue for $20 million to enhance two critical business programs at the Finance Authority of Maine (FAME).

In testimony before the Legislature’s Appropriations and Financial Affairs Committee, Rep. Giles said FAME funds are needed now more than ever – “not as a bailout, but as a stimulus to help Maine companies through the toughest economy we have seen.”

Rep. Giles (R-Belfast), a long-time community banker and a former member of the FAME board, told committee members that Maine’s 140,000 small businesses employ 65 percent of the state’s workforce.

As a commercial banker, she said, she continues to meet sole proprietors and companies that need financial assistance – lobstermen, retailers, florists, restaurant owners, manufacturers and more. “Some have cut expenses,” she said. “Others have laid off workers. Many are literally hunkering down while they ride out this economic storm.”

The $20 million bond issue, if approved by the Legislature and Maine voters, would increase two existing FAME business programs. The Economic Recovery Loan Program, which makes direct loans to businesses, would receive $10 million. The other $10 million would go to the Commercial Loan Insurance Program, which provides loan guarantees for banks. All funds would be repaid by business borrowers over time.

“The primary use of the funds is to assist businesses faced with a loss of revenue and profitability that has caused a need to restructure business indebtedness,” Rep. Giles told the committee. “Eligible businesses may refinance existing business debts, such as accounts payable, operating expenses, business credit card debt and other loans due within the current year.”

She added that during the recession of 1991-1992, FAME “played an essential role in preserving Maine jobs and companies during an extremely difficult period.” FAME was established as Maine’s business finance agency in 1983 and charged with supporting the start-up, expansion and growth plans of the state’s business community. It improves access to capital and helps fill gaps in Maine’s capital delivery system. FAME also administers the state’s higher education finance programs.

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