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SEED$ offers an alternative to payday loans | Local company

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

Laddie Cross, business and loan specialist for 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 they believe will prepare them for the next paycheck. .

But, in states like Missouri, which lightly regulates predatory lenders compared to other states, those borrowers could face fees 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 Community Loan Center of Southeast Missouri (CLC) is an employer-based, small-dollar loan program offered by participating employers in the East Missouri Action Agency (EMAA) service area. In fact, the EMAA is one of the participating employers.

“Someone may have a car repair they don’t have the money for at the time, or someone needs to take the family on vacation and wants some extra cash,” Cross said. . “We’ve had employees take out renewals, where they’ve paid off the original loan and taken out another one.”

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

Cross said the company they are franchised with, CLC of America, which has determined that 50% of salary is a pretty good yardstick to make sure employees don’t borrow too much to the point of financial stress. and emotionally. The company 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 Division of Finance,” Cross said. “There is a big difference between a payday loan and a consumer loan.

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

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

“It costs nothing except the time it takes to verify employment and coordinate direct deposit,” Cross said. “It’s an added benefit for the employee to bridge the payday gap.”

To learn more about the SEED$ CLC program and how it can benefit employers, visit

Sarah Haas is deputy editor of the Daily Journal. She can be reached at 573-518-3617 or [email protected]