Oct 6 - McClatchy-Tribune Regional News - Steve Everly The Kansas City Star, Mo.



A Missouri low-interest loan program for the first time is covering solar and wind projects when small businesses or homes use them to meet their energy needs.

Invest in Missouri is a 25-year-old program in which the state makes deposits in Missouri lending institutions so they can reduce interest rates on certain loans. The program is meant in part to boost the state's economy and create jobs.

The program has until now been entirely focused on helping the state's small businesses pay for things such as inventory, rent and renovations, and with farmers for such costs as livestock and production expenses. In addition, loans were available for businesses that produce alternative energy, which in Missouri mainly meant ethanol plants.

But Clint Zweifel, the Missouri treasurer, said only about $220 million was being used out of the $720 million available for deposits in the program. He suggested some changes, and in the last legislative session the General Assembly approved an expansion and some modifications of what is also referred to as the linked-deposit program.

"I'm really optimistic about the potential," he said. "I'm particularly interested in the Kansas City area."

The changes include allowing local governments for the first time to obtain loans for capital improvements or public programs. Eligible small businesses, which formerly had to have fewer than 25 employees, can now have nearly 100 employees. And alternative energy projects are no longer limited to businesses that sell what they produce.

Small businesses and homeowners who, for instance, install solar collectors for their own use can apply for the loans. Though the loans can't be used by homeowners for energy efficiency projects such as insulation or windows, small businesses and local governments can secure loans under the program for that purpose.

The changes went into effect in August, and Zweifel said he expects the program to become more popular as word spreads about the changes. He has also hired an employee who among other things will recruit more participating lenders. The program's lenders have been largely in small towns and rural areas, with none currently in the Kansas City area and only a handful in the St. Louis area.

He said he expected more participating lenders in both cities. Commerce Bank has a few branches participating in outstate Missouri, and a spokeswoman said its Kansas City area branches were capable of helping customers with the Invest in Missouri program.

The loans carry interest rates about 2 to 3 percentage points below market rates. The subsidized loans can be for five years and can be for additional years without the subsidy.

Borrowers initially file an application with the lender, who decides whether the borrower is creditworthy. The state has its own qualifications.

Homeowners wanting an alternative-energy loan must be at least 18, the project has to be in Missouri, and the borrower can't owe any unpaid state or local taxes.

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The details

For more information, call 573-751-2372 or go to www.treasurer.mo.gov/ linkeddeposit, which also includes an updated list of participating lenders.

To reach Steve Everly, call 816-234-4455 or send e-mail to severly@kcstar.com.

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