The state Development Finance Board has delayed a vote on a proposed low-interest loan program for smaller Missouri cities who have experienced financial pain from the coronavirus. Executive Director Bob Miserez tells Missourinet the $5 million plan could be limited to Missouri towns with a population of 25,000 or fewer.
Vote delayed on proposed loan program for Missouri cities struggling during coronavirus
“We didn’t know how much that limited amount of funds was going to really impact and be meaningful to the largest cities in the state,” he says. “Plus, they’re a lot more sophisticated and they do have access to other programs. They’re going to be hurting also but we didn’t know that we would be meaningful and have a real impact to them.”
Miserez says all but about 29 Missouri cities could qualify.
The board is considering a loan minimum of $50,000 to a maximum $300,000 to help cover essential services like police, fire department and waste management.
“There’s a lot of programs out there that can help small businesses,” he says. “We could also, but we didn’t see that kind of assistance going to local governments and we knew that they were going to be facing budget shortfalls. When you get to a point like we got this year where the revenues just fall off the cliff, how do they then match what they’re not receiving to pay the costs that they’ve already obligated themselves to pay?”
Members are looking at a plan that could include loans between one year and four years with a stair step interest rate structure. Under the initial proposal, cities who would get a loan would be required to shell out a $1,000 deposit.
“Basically to escrow – to help us offset the costs of developing this and the legal to develop the loan documents, which are going to be fairly simple but then we’re not going to charge any loan origination fees thereafter. We were proposing that upon approval and funding of a loan that the $1,000 be rebated back to them. In effect, it would cost them nothing to apply,” says Miserez.
If approved, the program could be up and running by mid to end of July. The board could vote on the proposal later this month.
Board members include:
• Marie Carmichael, Chair
• Reuben A. Shelton, Vice Chairman
• John E. Mehner
• Matthew L. Dameron
• Kelley M. Martin
• Bradley G. Gregory
• Cliff Holekamp
• Mike Kehoe, Lieutenant Governor
• Rob Dixon, Director, Missouri Department of Economic Development
• Chris Chinn, Director, Missouri Department of Agriculture
• Carol Comer, Director, Missouri Department of Natural Resources
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