JEFFERSON CITY — The Missouri House gave first-round approval Tuesday to a plan to expand a state-funded low-interest loan program designed to help small businesses, farmers and local governments.
The measure, sought by Republican Treasurer Vivek Malek, would raise the cap on the loan program from $800 million to $1.2 billion.
“This program helps support small businesses and the ag industry across the state,†said Rep. Terry Thompson, R-Lafayette, who sponsored the change.
The proposal needs one more vote in the House before it heads to the Senate, where it failed to advance last year.
Because of rising demand brought on by higher interest rates, Missouri’s linked-deposit loan program neared its statutory cap of $800 million last year.
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Malek, an appointee of Gov. Mike Parson who is seeking a full, four-year term, reopened the program in January, but a high number of applications forced him to shut it down just hours later.
Under the program, the state deposits money in banks at below-market interest rates, allowing borrowers to reduce their interest rate by an average of 2-3 percentage points.
The expansion could cost the state $12 million of potential earnings, but that amount could be offset by an uptick in economic activity generated from the loans, according to fiscal analysis of the measure.
“Increasing the allocation for (MOBUCKS) could result in a decrease to state revenues given that there are investments with higher interest rates of return that the (state Treasurer’s Office) could take advantage of,†according to the analysis.
Thompson earlier said that 136 banks spanning every state Senate district participate in the program.
Malek faces a GOP primary challenge from Rep. Cody Smith of Carthage, Sen. Andrew Koenig of Manchester and Springfield attorney Lori Rook.
This legislation is House Bi