Under the BIG Missouri Linked Deposit Program for Job Enhancement, the Missouri Treasurer has the authority to place a low interest linked deposit of up to $50,000 per job created or retained, in an approved Missouri financial institution.

Purpose

The BIG Missouri Linked Deposit for Job Enhancement Program was established to stimulate employment by making low interest rate loans through Missouri financial institutions available to Missouri businesses that create high quality jobs.

Eligibility

Eligible businesses include new, existing, or expanding firms located in Missouri that employ 10 or more full-time employees annually. They must create at least one job for each $50,000 borrowed under the linked deposit program.

The same criteria apply for job retention, but companies are required to provide documentation that establishes “retention”. Examples of situations where loans will be made for job retention include:

• A plant or company will be shut down without assistance in refinancing debt.

• A plant or company is being sold, and financialassistance is needed for a prospective buyer who wishes to keep the company in Missouri.

• A plant must renovate, modernize or upgrade their facility to comply with regulatory or other requirements, or else the company must shut the facility down.

Allocation of Funds

A total of $220 million has been allocated for the BIG Missouri Linked Deposit Program for Job Enhancement with a minimum deposit of $90,000.

Deposits are made for a one-year period, and are generally not subject to renewal. However, if original job creation projections are met and additional job creation is expected in year two, the deposit may be renewed if funds are available.

Funds for loans paid down or paid in full during the term of the deposit may be returned to the Treasurer in increments of not less than $90,000. The interest rate on the balance will remain at the original deposit rate.

Interest Rate on Deposits

The interest rate for the deposit with the financial institution providing a linked deposit loan is based on a formula set by State law. The interest rate is set based on the Treasury bond yield of the comparable term. When Treasury yields are above 5% for the comparable term, the State Treasurer may reduce the yield on the deposit to the financial institution by as much as 3%. When Treasury yields are below 5%, the State Treasurer may reduce the yield based on a formula set in law, so long as the yield on the deposit with the State is not below 1%.

State law requires that the amount of the interest rate reduction must be passed on to the loan applicant for a linked deposit.

Interest Owed for Early Principal Payments or Other Situations

The below-market interest rates described above apply only to the amount actually placed and on loan by the qualified applicant. For lines of credit or other types of loans in which the amount of funds actually placed and being used by the client may be less than the amount of the linked deposit, the financial institution shall pay the State the usual market rate on any portion of a deposit held for any period when there is no corresponding linked deposit loan outstanding. Such a situation may arise as principal payments are made by the applicant for instance.

At the anniversary date of each linked deposit, the financial institution is required to calculate the loan dollar days for each loan by completing a "Deposit Data Summary" report. Any interest due to the State at the usual market rate is then required to be remitted. A spreadsheet which can be used to track any interest due can be downloaded below. Please contact the State Treasurer's Office for the actual interest rate factor.  

Interest Rate on Loans

The loan rate provided to the borrower for a linked deposit is set by state regulation and is dependent on the size of the linked deposit loan. For loans under $100,000, the loan is calculated as: sum of the current Prime Rate plus 1.50% multiplied by 75%. For loans over $100,000, the loan is set based on a certification by the financial institution of the normal lending rate that would have been offered to the applicant. This lending rate is multiplied by 70% to determine the new loan ceiling rate for the linked deposit applicant.

Audit Process

The purpose of this program is job creation. Therefore, audits will be conducted to ensure the projected number of jobs listed on the borrower’s original loan application is created by the company during the deposit period, and that the loan proceeds are used in accordance with the law. If the borrower does not meet these requirements, the Treasurer will charge the lending institution the normal deposit rate. The lender, in turn, may charge the borrower the normal lending rate.

Certification

Borrowers are required to:

• Be in compliance with all state and federal laws.

• Meet the eligibility requirements specified in the laws governing the linked deposit program.

• To use loan proceeds only for authorized purposes.

• Be current on state taxes

Application Procedure

Applications for this program are available at financial institutions statewide. You may also contact the Treasurer’s Office in order to request an application:

Treasurer Sarah Steelman
Attn: Linked DepositProgram
PO Box 210
Jefferson City, MO 65102
(573) 751-2372

Click on the link below to download the application from this web site.

Complete the loan application, making sure to fill in or check all portions on the form. Submit the application to any participating financial institution. The financial institution will forward the application to the Treasurer’s Office. Loan approval is determined by the financial institution, subject to it’s standard credit policy.

Download Applications Here