The Finance Authority of Maine is upping the maximum limit of a popular commercial loan insurance program by 50 percent, the organization said.

The six-year-old insurance program’s limit has been increased from a total exposure per loan of $250,000 to $375,000.

William Norbert, FAME’s governmental affairs and communications manager, said the increase was enacted because the program has proven its effectiveness and experienced a default rate of less than 2 percent since it began.

“It really is just a natural progression,” Norbert said.

The commercial loan insurance program is known as the OnLine Answer Program because it provides financial institutions an immediate answer over the Internet when they request insurance from the Finance Authority of Maine, a quasi-independent state agency. FAME makes direct loans and supports financing of commercial projects through a guarantee program, in addition to making money available for student loans and other consumer-oriented programs.

The insurance program is designed to increase the number of commercial loans issued in Maine, a key driver of economic growth. Commercial banks still issue the loans, but up to 75 percent of the principal is insured by FAME.


For instance, if a bank issues a $500,000 commercial loan, FAME will pay it up to $375,000 if the borrower defaults.

The program is used primarily when the lender otherwise would not approve a commercial loan without backing from the finance authority.

To date, the program has insured about $74.9 million in commercial loans. Of that, it has paid out just over $1 million in insurance settlements to financial institutions for loan defaults, a ratio of about 1.4 percent, Norbert said.

The limit increase was approved by FAME’s board of directors during a July 17 meeting after taking input from its Lenders Advisory Group, made up of officials at various financial institutions in Maine.

In addition, the board approved a number of other enhancements to the OnLine Answer Program.

The enhancements are designed to provide a better customer experience and an easier user interface, and will help to ensure consistency among users.

New features include a single, scrolling entry screen, automatic calculation of debt service coverage, and user support screens. Also available through the website are an enhanced training tutorial and user manual for lenders.

More information about the online service is available at


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