Missouri lawmakers back big expansion of low-interest loans amid growing demand for state aid
Advertisement
Read this article for free:
or
Already have an account? Log in here »
To continue reading, please subscribe:
Monthly Digital Subscription
$1 per week for 24 weeks*
- Enjoy unlimited reading on winnipegfreepress.com
- Read the E-Edition, our digital replica newspaper
- Access News Break, our award-winning app
- Play interactive puzzles
*Billed as $4.00 plus GST every four weeks. After 24 weeks, price increases to the regular rate of $19.00 plus GST every four weeks. Offer available to new and qualified returning subscribers only. Cancel any time.
Monthly Digital Subscription
$4.75/week*
- Enjoy unlimited reading on winnipegfreepress.com
- Read the E-Edition, our digital replica newspaper
- Access News Break, our award-winning app
- Play interactive puzzles
*Billed as $19 plus GST every four weeks. Cancel any time.
To continue reading, please subscribe:
Add Winnipeg Free Press access to your Brandon Sun subscription for only
$1 for the first 4 weeks*
*$1 will be added to your next bill. After your 4 weeks access is complete your rate will increase by $0.00 a X percent off the regular rate.
Read unlimited articles for free today:
or
Already have an account? Log in here »
Hey there, time traveller!
This article was published 18/04/2024 (526 days ago), so information in it may no longer be current.
JEFFERSON CITY, Mo. (AP) — Missouri lawmakers gave final approval Thursday to significantly expand a low-interest loan program for farmers and small businesses, in a move that reflects strong consumer demand for such government aid amid persistently high borrowing costs.
The legislation comes as states have seen surging public interest in programs that use taxpayer funds to spur private investment with bargain-priced loans. Those programs gained steam as the Federal Reserve fought inflation by repeatedly raising its benchmark interest rate, which now stands at a 23-year high of 5.3%.
Higher interest rates have made virtually all loans more expensive, whether for farmers purchasing seed or businesses wanting to expand.
Under so-called linked-deposit programs, states deposit money in banks at below-market interest rates. Banks then leverage those funds to provide short-term, low-interest loans to particular borrowers, often in agriculture or small business. The programs can save borrowers thousands of dollars by reducing their interest rates by an average of 2-3 percentage points.
When Missouri Treasurer Vivek Malek opened up an application window for the program in January, he received so many requests that he had to close the window the same day.
Malek then backed legislation that would raise the program’s cap from $800 million to $1.2 billion. That bill now goes to Gov. Mike Parson.
“The MOBUCK$ program has skyrocketed in demand with farmers, ranchers and small businesses, especially during these times of high interest rates,” Malek said in an emailed statement Thursday praising the bill’s passage.
The expansion could cost the state $12 million of potential earnings, though that could be partly offset by the economic activity generated from those loans, according to a legislative fiscal analysis.
Not all states have similar loan programs. But neighboring Illinois is among those with a robust program. In 2015, Illinois’ agricultural investment program had just two low-interest loans. Last year, Illinois made $667 million of low-rate deposits for agricultural loans. Illinois Treasurer Michael Frerichs recently raised the program’s overall cap for farmers, businesses and individuals from $1 billion to $1.5 billion.