Originally published in the Columbia Missourian on Jul. 23, 2022.
Four years after the General Assembly approved a mentorship program for veterans who receive low-interest loans to start new businesses, the Missouri Department of Economic Development has yet to launch the effort.
HB 1503, approved by the legislature in 2018, required that veterans be given priority for low-interest loans through a linked-deposit program called MoBUCK$ that is administered by the office of state Treasurer Scott Fitzpatrick. It also called on the Department of Economic Development to establish a Boots-to-Business mentorship program to help ensure the success of those veterans’ ventures.
To date, the bill hasn’t moved the needle much.
Lynn Lowder, founder of the Veteran Business Project, persuaded then-Rep. Dean Dohrman, R-LaMonte, to push the legislation through in 2018.
“What you find out over time is getting legislation through is one thing,” he said. “Implementing it and championing it to individuals is something else again.”
Dohrman, who is no longer a lawmaker, said he was interested in giving a boost to veterans who sought to strike out on their own.
“If you could drop your interest any points, that’s money saved that can go back into building the business,” Dohrman said. “I think it’s going to be a real opportunity for the future.”
Lowder established his 501©3 more than nine years ago. As a Vietnam veteran, he said, he knew the importance of supporting veterans who are trying to return to normal life after combat.
“Many of them are far better off being the captain of their own rowboat as opposed to being buried into the engine room of a great big ocean liner or somewhere, if you know what I mean,” he said.
Fitzpatrick’s office has been working hard to increase awareness of the linked-deposit program. Spokesperson Mary Compton said the office has contacted more than 1,200 financial institutions and encouraged them to promote it to their borrowers.
Fitzpatrick also held a news conference in Columbia recently with Gregg Bexten, regional president at Hawthorn Bank.
“With the rates being so low, we haven’t utilized the program much in the past years,” Bexten said, “but as rates rise, it is a great program for us to get that money in a deposit and then lend it out a little bit cheaper.”
Fitzpatrick said the loan program “can be really important, especially in times where there’s economic uncertainty, for the business to have access to affordable capital.”
“It gives preference or priority to veterans if there’s ever a shortage of access to these funds,” Fitzpatrick said of HB 1503. “We’ve never encountered a situation where we haven’t had funding available and you have to prioritize, but we have in this program I think about $40 million over the last 10 years.”
Data from the treasurer’s office shows the state has, indeed, backed about $38.9 million in loans to veteran-owned businesses since 2012, including 17 loans in 2018 worth a total of $10.7 million. The amount of loans to veterans backed by the linked-deposit program has dropped precipitously since then. Just one such loan worth $68,000 was issued in 2021.
Compton said in an email that the treasurer’s office already is seeing an uptick in MoBUCK$ participation in the wake of the Federal Reserve raising interest rates in its efforts to combat inflation. Compton said the linked-deposit program backed a total of $27.9 million in low-interest loans in 2021. In the first six months of 2022, it placed $58.7 million in linked deposits.
The Boots-to-Business program, on the other hand, isn’t off the ground yet.
Amy Berendzen, spokesperson at the Department of Economic Development, told the Missouri News Network that the program is awaiting final approval. She said in an email that the department is “proud to partner with the State Treasurer’s Office as it supports military veteran business owners through the MOBUCK$ linked deposit program.”
Berendzen said her department “stands ready to connect veteran business owners who are MoBUCK$ participants with Missouri Boots-to-Business mentors who will support and advise them as they build and sustain their businesses.”
Compton said that once the Boots-to-Business program is in place, the treasurer’s office will help connect the Department of Economic Development with veterans who receive low-interest loans.
Lowder said he has been working with the economic development staff to develop the mentorship effort. Although it’s been slow going, he said Missouri overall has been supportive of veterans seeking to launch their own businesses.
“In terms of people in a state that are supportive in general of veterans and really get what veterans are about, I don’t think Missouri takes a second seat to anybody anywhere,” Lowder said. “So if there’s a state that could grab ahold of this concept about veterans getting into business for themselves, it’s Missouri.”
