Small businesses in Southeast and south-central Missouri could benefit from a new low-interest loan program, Gov. Bob Holden said Friday.

The governor announced the creation of the Grow Missouri Fund, a loan program, at a news conference at the Show Me Center in Cape Girardeau.

"We are excited about the potential to create jobs, and we are going to start it right here in Southeast Missouri," Holden said.

Holden said the program is a partnership among the Missouri Department of Economic Development, the city of Cape Girardeau, 29 Southeast Missouri counties, regional planning commissions and the National Development Council, a nonprofit economic development organization based in New York.

The state has earmarked $1 million in Community Development Block Grant money for the loan program. Coupled with funding through the National Development Council, the program will have a loan pool of about $5 million, officials said.

The city of Cape Girardeau will serve as the lead agency, administering the use of the block grant money. Area regional planning commissions will handle the loan applications.

Holden said the program will help small businesses with fewer than 500 employees obtain low-interest loans that wouldn't be available through commercial lenders.

The loans can be used for various expenses, including to buy equipment or land, purchase an ongoing business, repay existing debt, and provide working capital.

The loans won't be used for startup businesses for the most part, although applications will be considered on a case-by-case basis, state economic development officials said.

"Small businesses are very important to Missouri," Holden said. "They are the backbone of our economy and create many new jobs. But access to capital is a major challenge and this program will help meet that challenge."

Holden said similar loan programs have been used in the nation's urban areas.

At the news conference, Holden also announced the state will spend $282,000 to help train new workers and retrain employees for new tasks at 11 companies in Southeast Missouri.

The list includes $23,000 to train 150 workers for the Procter & Gamble plant in Cape Girardeau County, and $17,250 each for Lone Star Industries in Cape Girardeau and Rubbermaid in Jackson.

The governor made the announcement prior to convening the initial meeting of the Missouri Delta Commission. The commission, created by the state legislature last year and appointed by Holden, is chaired by Dr. Ken Dobbins, president of Southeast Missouri State University.

The commission will look at ways to boost the economy in Southeast Missouri. One of the commission's tasks will be to develop an economic development plan for the counties that are served by the federal Delta Regional Authority.

Created in 2000, the federal authority provides funding for programs and projects in 236 counties in eight states bordering the Mississippi River, extending from Missouri to Louisiana.

Holden told the 18-member Missouri Delta Commission that Southeast Missouri is plagued with poverty.

"This whole area for a long time has been economically depressed and I want to change that," he told the commission.

Dobbins said the commission could help secure federal grants through the Delta Regional Authority. "I think this is a great opportunity to coordinate regional development and economic initiatives and hopefully get some federal money," he said.

Over $1.7 million in federal authority grants could be available to projects and programs in Southeast Missouri over the next year, Dobbins said.

The commission, he said, also will work to secure money from private foundations to fund economic development projects.

mbliss@semissourian.com

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