Tuesday, December 21, 2010
AAA Waste Management of Fulton has received a $144,000 low-interest state loan to purchase new equipment and hire another employee.
David Holliday, AAA Waste Management co-owner along with his wife, Winifred, said the Fulton-based firm “is growing and looking for ways to provide a high standard of service to a larger region.”
AAA Waste Management provides residential and commercial garbage collection in Centralia, Columbia, Hallsville, Hartsburg, Harrisburg, Moberly, Rocheport and Sturgeon. The garbage service in Fulton is provided by the City of Fulton, but Holliday said his firm collects garbage just outside the Fulton city limits.
The $144,000 low-interest loan received by AAA Waste Management was provided through the Missouri Linked Deposit Program operated by the state treasurer’s office.
Holliday said the loan will be used to purchase a new garbage truck, dumpsters and to hire one new full-time driver. The Fulton firm has six employees, including Holliday.
“We plan to hire another employee in four to five months as our business expands in the Moberly, Madison and Huntsville area,” he said.
Holliday estimated he will save from $5,000-$5,500 in interest costs on the loan. The 7 percent loan was reduced to 4.9 percent.
“The Missouri Linked Deposit Program is helping AAA Waste Management grow, and we look forward to expanding into new market areas,” he said.
Under the Missouri Linked Deposit program, the state loses interest money on state tax funds it deposits with banks. State tax funds are deposited with a local financial institution. The local bank pays the state a reduced rate of interest for the state deposit if the bank agrees to lend its own separate funds to an eligible borrower at a comparably reduced interest rate.
State tax money is never at risk through the loans, because banks must use their own money to make the low interest-loans. Banks also are responsible for collecting interest and repayment of the loans.
The interest rate the bank pays the state is set off the market rate, which is computed based on the average certificate of deposit rate. When the market rate is above 5 percent, the treasurer’s office may reduce the state’s yield on its tax deposit to the lender by as much as 3 percent. When the market rate is below 5 percent, the treasurer may multiply the rate by as much as 60 percent.
State law requires the amount of interest rate reduction by the state to the bank must be passed on by the bank to the low-interest loan applicant.
Callaway County banks participating in the linked deposit program include The Callaway Bank and Bank Star One, both of Fulton, and Central Trust Bank of Jefferson City.