Demand for Government Loans for Small Business Grows | New Mexico News

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MORGAN LEE, Associated Press

SANTA FE, New Mexico (AP) – New Mexico State financial authorities said the demand for minimum interest rate loans aimed at helping small businesses that have lost income or experienced major disruptions during the coronavirus pandemic appears to be on the rise.

New Mexico Mortgage Finance Office CEO Marquita Russell told a group of state legislators on Wednesday that some 865 businesses have applied for loans totaling $ 65 million since the program was revised in March.

Reforms to the government’s small business recovery loan program, signed by Democrat Gov. Michelle Lujan Grisham in early March, raised the ceiling for an individual loan to $ 150,000 and expanded credit eligibility after businesses expressed limited interest in the original program.

“This program, as a result of the changes it made, did have some success and we noticed a lot of interest,” Russell said.

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The federal government closed its payroll protection program, which provided bad loans to businesses starting in April 2020. Restaurants are still awaiting federal aid as part of the Biden administration’s $ 1.9 trillion coronavirus relief package.

New Mexico Small Business Recovery Loans pay off at half the base rate that commercial banks charge their most creditworthy clients, with zero interest accrued in the first year. There is no installment plan for the first three years.

The program was originally created during a special session of the Legislature in June 2020, when the pandemic intensified and state health emergency orders closed a number of nonessential businesses that could not work remotely.

Under the original terms of the program, the state made a loan of $ 41.7 million through about 880 approved applications.

The current application period will run until May 31, 2022 on a first come, first served basis. The financial authority can provide a loan of up to $ 500 million.

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