AUGUSTA – In an effort to keep the state’s vital small business economy afloat, the Finance Authority of Maine has cut the interest rate of its Economic Recovery Loan Program and set aside more money for businesses to become more energy efficient.

“We are identifying energy conservation as a primary need in the state, and so we are allocating some of our Economic Recovery Loan Fund to be used specifically for energy conservation purpose,” said Beth Bordowitz, FAME’s chief executive officer.

Bordowitz said FAME directors cut the rate 2 percent Feb. 21 and formally announced the move on Thursday at Gov. John Baldacci’s Energy Efficiency Summit. The rate, now 5.25 percent, will remain the same until June 30. In recent months, there has been an increase in applications for small business loans, she said.

Truck drivers benefit

“It’s been pretty widespread,” said Bordowitz of the types of businesses applying for loans. “We know that several truckers have come and used the program to purchase units that allow them to save a lot of energy while idling. They get a fairly quick payback on that, and there’s significant energy savings for those types of units.” Truck drivers held a rally at the State House in Augusta last week to protest high diesel prices.

John Richardson, commissioner of Maine’s economic and community development, said it is obvious that rising gas prices are quickly becoming a challenge to business owners. “There’s no question that fuel costs are a kick in the can,” he said. “Transportation costs are getting higher. FAME is serving a very important role in giving people time to go back to the drawing board and figure out how to reduce energy costs.”

Rep. Nancy Smith, D-Monmouth, has had several conversations with troubled truckers in recent weeks. Smith, House chairman of the Business, Research and Economic Development Committee, said the interest rate reduction for FAME’s economic recovery loans will help struggling business owners.

“The truck owners are getting hit especially hard because fuel is such a huge percentage of their expenses,” she said. “The Economic Recovery Loan Program is a tool that we can give businesses to respond quickly when they’re distressed.”

FAME’s Bordowitz said they are able to approve complete applications in five days or less. Smith said it’s not just about the truckers who should be concerned.

“We don’t want to lose these small, independent trucking companies,” she said. “They are providing a vital service to Maine consumers. We’re all dependent on trucks to bring in food, clothing and any kind of goods that we purchase.”

Help too late for some

But trucking company owner David Mihalik of Monmouth said the help is too late for him. He owns Mihalik Family Transport, which two months ago had six employees. Now only it has only one, Mihalik himself.

“Fuel cost was the final nail in the coffin,” Mihalik said. “Our figures at our business are running at a negative right now.” The last time his company ran a significant profit was two years ago, he said.

“I’m selling my trucks…my plans are right now to leave the state of Maine,” Mihalik said.