Purpose

The BIG Missouri Linked Deposit for Small Business Program was established to stimulate small business growth and development by providing business owners access to low interest rate loans.

Program Objectives

The program makes state funds available at reduced interest rates to lenders who agree to make reduced interest rate loans to small business borrowers through the BIG Missouri Linked Deposit Program. Participation in the program is limited to five years.

The funds may be used for operating expenses or the refinancing of an existing qualifying loan for operating expenses including the purchase or refinancing of real property.

Eligibility

• Headquartered in Missouri
• Maintains operations and transacts business in Missouri
• Employs fewer than 25 full time/part time employees
• Borrower is organized for profit
• Does not currently owe any unpaid, non-protested taxes to the State or any political subdivision
• Business has no environmental compliance issues with the MO Department of Natural Resources

Allocation of Funds

A total of $110 million has been allocated for the BIG Missouri Linked Deposit Program for Small Business.

How May Loan Proceeds Be Used?

Small business loan proceeds may be used for the following operating expenses:

• Inventory
• Rent, utilities, insurance, or taxes
• Professional fees
• Equipment purchase, rental, or lease
• Renovations, repairs, and maintenance of equipment and facilities (i.e. paving, fencing, installation of loading docks, etc.)
• Purchase of land and buildings

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.

Certification

Borrowers are required to:

• To be in compliance with all state and federal laws
• To 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

Any loan proceeds not used for authorized purposes must be returned to the lender. Misrepresentation of information provided in order to obtain a linked deposit, or violation of certification requirements, is a Class A misdemeanor. The Treasurer monitors compliance with these provisions of the law.

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 Deposit Program
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 short and easy 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 its standard credit policy.

Download Applications Here