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$ SEED Offers An Alternative To Payday Loans Local company


As COVID-19 declines and federal and state stimulus payments dry up, debt continues to rise for many as they return to work amid rising prices and stagnant wages.

Laddie Cross, a business and loan specialist for the Southeast Economic Development Fund Inc. (SEED $), is a retired banker who said many might be tempted to turn to a payday loan for a quick fix that, according to them, will pass them to the next paycheck. .

But, in states like Missouri, which lightly regulates predatory lenders compared to other states, those borrowers could face charges equivalent to 463% for short-term loans.

Late last summer, SEED $ began offering a program that offers borrowers an alternative to predatory lenders. Launched in July 2020, the Southeast Missouri Community Lending Center (CLC) is a small dollar loan program offered by employers and offered by participating employers in the service area of ​​the East Missouri Action Agency ( EMAA). In fact, EMAA is one of the participating employers.

“Someone may have a car repair they don’t have money for at the time, or someone has to take their family on vacation and wants the extra funds,” Cross said. “Some employees took out renewals, paying off the original loan and taking out another. “

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Cross said the interest rate is a fraction of that charged by payday loan companies on a loan of up to $ 1,000, and that the loan is expected to be paid off within a year. The loan amount is determined in part by the borrower’s salary – it cannot exceed 50% of a monthly salary, so if someone earns $ 2,000 per month, they can borrow $ 1,000.

Cross said the company they were franchising with, CLC of America, which determined that the 50% of salary was a good enough indicator to ensure that employees did not borrow too much to the point of financial stress. and emotionally. The business uses a small portion of the 18% interest payment for record keeping and accounting.

“We are not a payday loan company, we are considered a consumer loan company licensed by the Missouri finance division,” Cross said. “There is a big distinction between the payday loan and the consumer loan.

“A consumer loan is cheaper, it doesn’t consist of a payday loan. There is no guarantee, and it is a virtual guarantee that you will get it, if you work for one of the participating employers and are in good standing. If an employee goes online and applies today and the employer verifies the job before 3pm, that’s a pretty good bet, the loan can be funded in a day or two.

Cross said the program now has three participating employers, but for the program to work even better, they need more participating employers.

“It doesn’t cost anything except the time it takes to verify employment and coordinate direct deposit,” Cross said. “It is an added benefit for the employee to bridge the gap between pay days. “

To learn more about the SEED $ CLC program and its benefits for employers, visit

Sarah Haas is the associate editor of the Daily Journal. She can be reached at 573-518-3617 or