This is how you help local businesses expand in South Dakota without giving a handout;
Gov. Dennis Daugaard recently announced the state Board of Water and Natural Resources has approved an $860,000 low-interest loan from the Solid Waste Management Program for Millennium Recycling in Sioux Falls to purchase equipment.
“These funds will help Millennium Recycling obtain equipment to accept additional recyclables, which will reduce the waste stream to regional landfills,†Daugaard said.
The project involves adding equipment to allow Millennium Recycling to sort plastic containers, such as milk, juice and broth cartons, for recycling. Additionally, Millennium will reconfigure sections of its single-stream recycling process to add the new capability and increase the efficiency of its operation.
The estimated cost of the equipment is nearly $1.2 million. The loan terms are 2.25 percent interest for 10 years.
Giving low interest, or even no interest loans to businesses that are beneficial to citizens is the smart way to go. When you give a loan instead of a handout, it is sending a message to taxpayers that this business intends to be around for awhile and make good on the loan, and better yet, improving our quality of life.
Low/no interest loans certainly send a message. That message is: Real banks aren’t willing to take on the risk posed by this loan (or the margins are so small that a fair market interest rate doesn’t leave any room for profit) , so instead politicians are going to gamble taxpayer money on it. That and the whole picking winners and losers thing.
At least Millennium can depend on a government mandate to ensure they have some level of demand for their services.
ERRR. Wrong.
Guess who buys these low-interest loans? Banks. When I got my community development loan, Wells Fargo snatched it up like candy. Why? Because they ARE secure. There is a whole host of crap you have to go thru to get these loans, trust me.
As for Millenium, I don’t think we need to worry about them bailing on the loan, as long as your kids suck down sodas and drink bottled water.
Millenium is a good locally owned operation. They used to operate the monthly electronics drop off for the city. Just as this drop off program was becoming successful, the city built their recycling center, hired employees and started shipping the ‘stuff’ to Wisconsin.
I have never understood why the city has take over or destroy functions serviced very well by private sector entrepreneurs. Water parks, indoor swimming pools, city employees / equipment relaying street asphalt and many other private industry functions the city now takes from private sector.
This town makes very little sense. We have TIFs for friends to build restaurants, bridges to no where, an Events Center to be built in the middle of nowhere, and we have to begin to wonder where the money is to pay for all of this. What is the status of the EC bond sales? They have been released but have they been sold yet? If we are getting to the end of our debt ceiling, who is benefiting from these excesses?
I agree with helping a solid company like MR as long as government quits trying to put them out of business on the other side. We may not be able to do much in the future for growing businesses in the future with to poor local government management.
If the banks want these loans so badly, why does the government need to be involved. Why don’t the companies just go to the bank a get a loan? Why do we need the government as a middleman?
Because the government does all the leg work on these loans and makes sure they are secure, that’s why banks snatch them up.
Why can’t the bank do the legwork themselves? Why do we need to pay public employees to do the bank’s work so Wells Fargo can pad their bottom line?
These loans are specific. You must spend them on ‘needed’ upgrades.
Please, I don’t want to go into a long rant about this, just research community development loans, and you will understand.