Action Fund Loan

PURPOSE
Provides a loan to certain types of for-profit companies that need funds for start-up or expansion and have exhausted other sources.

AUTHORIZATION
42 USC § 5301 et seq., 24 C.F.R. Part 570; and Missouri’s “Consolidated Plan” submitted to the U.S. Department of Housing and Urban Development.

ELIGIBLE AREAS
Projects can only be in a “non-entitlement” area - a city under 50,000
in population or a county under 200,000 in population.

ELIGIBLE APPLICANTS
Cities and counties must apply on behalf of beneficiary companies. For-profit manufacturing, processing and assembly companies that will have wages above the county average and provide medical benefits are prioritized.

PROGRAM BENEFITS/ELIGIBLE USES

• The purchase of new machinery and equipment, working capital, building acquisition and/or construction land acquisitionare eligible.
• Refinancing, pay out of stockholders, buyouts or lines of credit are not eligible.

FUNDING LIMITS

• The business must have exhausted other funding sources.
• Only the least amount needed to complete the project may be provided.
• Lesser of $750,000 per project; 40% of the total project cost; or $25,000 per new job.
• Interest Rate: Determined by DED.
• Term:  Three to ten years.
• Collateral:  Depends on the predictability of the cash flow.  The loan may be in a subordinate collateral position to the primary lender at the sole discretion of DED.

APPLICATION/APPROVAL PROCEDURE
An application must be submitted by the Sponsor on behalf of the business.  Applications are reviewed on a case-by-case basis, subject to fund availability.

REPORTING REQUIREMENTS

• Borrower must provide quarterly financial reports and a fiscal year end report
• Employment Status Statement Forms

SPECIAL PROGRAM REQUIREMENTS

• LMI Employees:  At least 51% of the new jobs to be created must be taken by persons considered “low to moderate income” (LMI).
• Prevailing Wage Requirement:  If loan proceeds are used for the financing of building construction or the installation of machinery, prevailing wages must be paid to the employees of the contractors.

CONTACT
Missouri Department of Economic Development
Division of Business and Community Services
Finance Management Team
301 West High Street, Room 770
P.O. Box 118
Jefferson City, MO 65102
Phone: 573-751-4539     Fax: 573-522-4322
E-mail: dedfin@ded.mo.gov

Business and Community Services
301 W. High Street, Rooms 720, 770  Jefferson City, Missouri 65102
Tel: 1-866-647-3633    Fax: 1-573-751-7384    Email: missouridevelopment@ded.mo.gov