Need money for your small business?
The state of Missouri is trying to do its part to make it easier to obtain.
Changes to the Missouri Economic Development Small Business Loan program allow businesses with up to 15 employees to borrow as much as $50,000 at a 3 percent interest rate.
Before the Missouri Development Finance Board approved the changes Jan. 4, businesses with up to five employees could borrow up to $25,000.
The loans, which are approved through the Department of Economic Development, can be used for capital and operation expenditures.
The program launched in April 2009 with $2 million available. Through fiscal 2010, which ended in June, 48 small businesses borrowed between $5,000 and $25,000 apiece, and now about $676,000 remains available to lend, said DED spokesman John Fougere.
Springfield used car dealer Darin Patterson used his $25,000 loan to establish a paintless dent removal and door-ding repair department. The owner of Patterson Auto Group, 3533 W. Sunshine St., said he hopes the services create another revenue stream, but for now, the new department only serves his own inventory.
Patterson said he previously outsourced repair jobs for roughly $100 each for minor dents, but his cost is only $20 with his own equipment and staff. The loan helped to cover dent-removal training for one staff member.
“It costs to send (staff) to school, but in the long run, it will more than pay for itself,” Patterson said. “I would not have survived had it not been for this program.”
Chris Dunham, owner of four-year-old Dunham’s Art of American Kenpo, 1322 W. Grand St., received a $16,000 loan through the program. The martial arts school is using the money to cover lease costs and utilities as well as advertising, moving expenses and permits.
“I would say, compared to some ways to get investments and loans, it was easier,” Dunham said. “It was definitely beneficial and worth the time. It just took a while to get everything set up.”
The application process requires a written business plan. Loan applications are available at www.ded.mo.gov
and take about two months to process.
Fougere said 51 loan applications have been approved out of around 200 that have been received since the program’s launch.
“This program is very important to our economy because small businesses are very important to our economy,” Fougere said. “It helps them with access to capital to buy equipment, stock inventories (and) hire more employees.”
According to the DED application, the loans can be used to pay for the following capital expenses: general liability insurance, property insurance and worker’s compensation; health insurance; leases/rent; payroll; contractors; telephone, Internet and utilities; and supplies.
Additionally, the loans can fund new equipment purchases and reimburse a company for equipment purchased within the previous three months.[[In-content Ad]]