JEFFERSON CITY — A state-financed low-interest loan program will be expanded to help more small businesses and local governments, under legislation approved by the Senate Thursday.
The measure, sought by Republican Treasurer Vivek Malek, would raise the cap on the loan program from $800 million to $1.2 billion.
Following unanimous approval in the Legislature’s upper chamber, it now heads to Gov. Mike Parson’s desk for his signature. A similar measure 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, a Parson appointee 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.
More than 130 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.
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