A new $8 million fund is making small loans to businesses in low-income areas of Missouri and Illinois.
St. Louis-based nonprofit Justine Petersen is operating the fund, which was created to provide capital to businesses that have difficulty accessing conventional bank financing.
The fund often charges higher interest rates than a bank, but it aims to help businesses ultimately become eligible for lower-interest bank financing.
The fund was established through New Markets Tax Credit funding. U.S. Bancorp Community Development Corporation is investing $2.6 million in federal New Markets Tax Credit equity into the fund, and Peoples National Bank of Mount Vernon, Illinois invested $5.7 million as the leveraged lender.
St. Louis-based Twain Financial Partners is overseeing federal compliance for the fund.
Read more: St. Louis Public Radio