Bullock Opens Loan Deferment Program
Governor Steve Bullock has created the Montana Loan Deferment Program to assist businesses impacted by COVID-19. The governor is directing $125 million to the program with $25 million specifically dedicated to hotels and restaurants and the remaining $100 million dedicated to other eligible borrowers.
The Montana Loan Deferment Program is facilitated by Montana banks, credit unions, and lending institutions in partnership with the State of Montana. Coronavirus Relief Funds will be used to provide payments to participating lenders to convert existing commercial loans to interest only status, with the result being an existing borrower will be able to defer principal and interest payments on existing loans for a period of 6 to 12 months, thereby freeing up a significant amount of otherwise- dedicated capital for the borrower on a monthly basis. Upon approval, the State of Montana will provide a lump sum CRF payment to the lender in an amount equal to the following: For borrower obligations with interest rates less than 6 percent, an amount equal to the full interest payments for the eligible term or for borrower obligations with interest rates of 6 percent or higher, an amount equal to 6 percent interest; for the duration of the eligible term, the lender will lower the interest rate to 6 percent for the modified deferral period. For variable rate loans, the interest rate used in the calculation will be the interest rate applicable to the loan at the time the application is submitted.
The maximum amount of CRF participation per loan note is $150,000.
Entities and individuals with multiple loans for one or several businesses will be allowed to apply for each individual loan. To be eligible, the borrower must certify to the following: Borrower is current on all debt obligations, as of Dec. 31, 2019; borrower has experienced a 25 percent reduction in gross revenue attributable to the direct or indirect impacts from COVID-19 during a comparable YOY period; borrower does not currently have access to 12 months of working capital from any other source, including owners, guarantors, affiliates, capital markets, etc.; the loan does not have an SBA 7A or 504 guarantee; borrower is not a publicly traded company; borrower is not engaged in any activity that is illegal under federal, state, or local law; borrower can demonstrate business is located in Montana and registered with Secretary of State to do business in Montana; borrower certifies accuracy of information provided and agrees certification is subject to all applicable laws, and punishable by law, pertaining to fraud and other false statements. Montana businesses should contact their lender to access the program.
