Mo. Small Business Loan Program Takes First Step

By DAVID A. LIEB

JEFFERSON CITY, Mo. (AP) -- Gov. Jay Nixon's plan to provide loans to small businesses took a step forward Tuesday despite some concerns about whether a state finance board could afford it.

The Missouri Development Finance Board voted to seek proposals from private-sector groups to administer the loans while simultaneously studying how the plan would affect the board's own finances.

Nixon's proposal would use $2 million from the finance board to establish a loan pool that could provide up to $25,000 each to businesses with five employees or fewer.

Since Nixon took office in January, more than 230 businesses have responded to an online survey expressing interest in the loan program. Demand is expected to far exceed the supply of money, said Department of Economic Development Director Linda Martinez, meaning the state could have to use a lottery system to decide which of the qualified businesses receive the money.

"To turn our economy around, Missouri small-business owners must be able to access capital to expand their operations and create the jobs of the future," Nixon said in a written statement. The board's action Tuesday is "an important step toward creating a pool of funds to provide low- and no-interest loans that will help small businesses grow and jump-start our economy."