MDFB QUICKLOAN PROGRAM

Guidelines

The MDFB QuickLoan Program is designed to provide Missouri governmental and quasi-governmental entities (“Public Entities”) quick access to short term loans at tax-exempt interest rates. 

The Program is not designed to compete with or replace the ready and cost effective access to the municipal market available to most Missouri Public Entities.  Instead, it is designed to fill a need for those unusual circumstances where a Public Entity decides that it would rather not go through the process of a bond or note issue.  Such reasons include:  (1) the size or term of the loan is such that the Public Entity determines that a bond issue is not cost-effective, (2) the loan is expected to be repaid from specific sources of revenue (e.g., federal or state grants or appropriation or the issuance of revenue bonds), (3) the collateral or project being financed is not readily subject to a typical sale-leaseback financing, (4) a desire for quick funding of a short-term loan with a minimum of paperwork, or (5) a desire to avoid making current debt service payments on a short-term loan pending repayment from specific sources of revenue (federal or state grants or appropriation).

All QuickLoan proceeds must be used to pay for public improvements.  Unexpended QuickLoan proceeds will be held by a trustee selected by the Board pending disbursement upon written request from the Public Entity.  Interest on unexpended moneys shall belong to the Public Entity and be credited to a project loan account.

Generally QuickLoans will be in a minimum amount of $250,000 and will have a final maturity date of not more than fifteen years.  QuickLoans may be interest-only or amortizing.  Monies cannot be used to acquire (1) land for industrial parks or other speculative development OR (2) property for private business.  Interest will be payable semi-annually.  In certain cases the Board will consider loaning the Public Entity amounts necessary to make interest payments on the QuickLoan for an agreed upon period of time.  Funds to enable Public Entities to make interest payments may be included in the amount of the QuickLoan or from other Board funds.  If other Board funds are used, the cost of such funds will be determined by the Board based upon its cost of funds at taxable interest rates.

QuickLoans will generally be secured by the full faith and credit of the Public Entity.  If the QuickLoan proceeds are intended to be used by a quasi-public entity, the QuickLoan may need to be made directly to the Public Entity sponsoring such quasi-public entity. The Public Entity must demonstrate the ability to repay the QuickLoan.  QuickLoans may not be limited obligations of the Public Entity, but may be subject to annual appropriation when required by state law.  It is not anticipated that a security interest in any property will be required in most cases.

QuickLoan Program Guidelines and Application