From Fortune:

The Missouri Treasurer is now accepting applications for about $120 million of state-subsidized, low-interest loans. Within six hours, so many requests came in that they had to abruptly cut off applications. States across the board have seen surging interest in such programs as interest rates skyrocketed after 11 interest rate hikes by the Federal Reserve.

Under linked-deposit programs, states deposit money at below-market interest rates, and banks provide cheaper loans to particular borrowers. These programs can save borrowers hundreds or thousands of dollars through reduced interest rates. States often cap the amount of money available due to the lower earnings generated for the state.

According to the National Association of State Treasurers, several states are considering reviving such programs to aid financially-strapped businesses and residents. Applications for these programs have dramatically increased in just a few years, following a series of interest rate hikes by the Federal Reserve.

After increasing demand, the Missouri Treasurer had to cut off applications at $800 million. About half of the initial applications came on behalf of just two financial institutions. These programs have been dormant in some states for years, but now banks are contacting state treasurers about restarting them.



Read more: Low-cost state funding programs for small business take off after Federal Reserve hikes interest rates