2023 New Mexico Statutes › Chapter 6 - Public Finances › Article 32 - Small Business Recovery and Stimulus › Section 6-32-4 - Loans; terms.

A. The authority shall receive and review applications for small business recovery loans pursuant to the Small Business Recovery and Stimulus Act. The authority may designate one or more application periods and shall review small business recovery loan applications received in each application period in the order in which the completed applications were received and shall provide a determination to the applicant within a reasonable time period after review. The authority shall make loans to qualifying small businesses; provided that funds are available and the qualifying small business satisfies credit and identification criteria, as determined by the authority. The authority shall adopt rules to govern the application procedures and requirements for disbursing loans under the Small Business Recovery and Stimulus Act, including requirements consistent with the purpose of that act for determining the eligibility of qualifying small businesses for loans; provided that the authority may issue rules to permit a business that does not have a record of actual losses, but can otherwise satisfy the requirements of the Small Business Recovery and Stimulus Act, to apply for a small business recovery loan.
B. The authority shall evaluate an application based on information received from the applicant as well as third-party credit and identification reports.
C. The authority shall make small business recovery loans in accordance with the following:
(1) the loan amount shall be in an amount not to exceed three hundred percent of the qualifying small business's average monthly business expenses as determined by the authority; provided that the maximum loan amount shall be no greater than one hundred fifty thousand dollars ($150,000);
(2) the terms of the loan shall require that:
(a) for a loan recipient that is not a non-employer business, the recipient shall use a minimum of eighty percent of the proceeds of the loan for: 1) ordinary and necessary business expenses, including capital expenses, other than compensation for an individual who owns equity in the business; 2) making adaptations or improvements to assets, including real property, that are necessary due to the coronavirus disease 2019 public health emergency to protect the public health; and 3) purchasing or improving any assets for the purpose of developing and growing the qualifying small business's e-commerce production and sales capacity;
(b) for a loan recipient that is a non-employer business, the recipient shall use a minimum of fifty percent of the proceeds of the loan for: 1) ordinary and necessary business expenses, including capital expenses, other than compensation for an individual who owns equity in the business; 2) making adaptations or improvements to assets, including real property, that are necessary due to the coronavirus disease 2019 public health emergency to protect the public health; and 3) purchasing or improving any assets for the purpose of developing and growing the qualifying small business's e-commerce production and sales capacity;
(c) the loan recipient provide a written certification signed by an appropriate officer of the qualifying small business that certifies that: 1) the officer understands that the business is receiving a loan under the Small Business Recovery and Stimulus Act that must be repaid by the business with interest under the terms of the loan agreement; 2) all documents submitted in support of the loan application and all statements and certifications made in the loan application are true and accurate to the best of the officer's knowledge; 3) prior to the issuance of the public health order issued by the secretary of health on March 23, 2020, the business was current on all obligations pursuant to the Income Tax Act [Chapter 7, Article 2 NMSA 1978], the Corporate Income and Franchise Tax Act [Chapter 7, Article 2A NMSA 1978], the Withholding Tax Act [Chapter 7, Article 3 NMSA 1978], the Gross Receipts and Compensating Tax Act [Chapter 7, Article 9 NMSA 1978] and the Unemployment Compensation Law [Chapter 51 NMSA 1978] applicable to the business's operations; and 4) all loan proceeds will be used for purposes as provided in the Small Business Recovery and Stimulus Act, including that no more than twenty percent of the proceeds may be used as compensation for employees who own equity in the business; and
(d) the loan recipient provide the authority with ongoing information relevant to the reporting requirements of the authority provided in Section 6-32-7 NMSA 1978;
(3) the terms of the loan shall not require that the qualifying small business provide a personal guarantee or collateral to secure a loan in the amount of seventy-five thousand dollars ($75,000) or less. For a loan in an amount greater than seventy-five thousand dollars ($75,000), the authority may require a personal guarantee or collateral to secure the amount of the loan greater than seventy-five thousand dollars ($75,000); provided that the authority shall define specific guidelines related to personal guarantees or collateral; and
(4) the application for a loan must be received no later than December 31, 2022.
D. The authority may exercise any power provided to the authority in the New Mexico Finance Authority Act [Chapter 6, Article 21 NMSA 1978] to assist in the administration of the Small Business Recovery and Stimulus Act; provided that the power is consistent with the provisions of that act.
History:
Laws 2020 (1st S.S.), ch. 6, § 4; 2021, ch. 5, § 4; 2022, ch. 25, § 2.
ANNOTATIONS
The 2022 amendment,
effective May 18, 2022, extended the date by which applications for loans pursuant to the Small Business Recovery and Stimulus Act must be received; and in Subsection C, Paragraph C(4), after "no later than", deleted "May" and added "December".
The 2021 amendment,
effective March 3, 2021, extended the deadline to apply for a small business recovery loan, changed the terms of small business recovery loans, increased the limits of small business recovery loans, and changed the permissible uses of the proceeds of a small business recovery loan, permitted the requirement of a personal guarantee or collateral for certain small business recovery loans; changed each occurrence of "Small Business Recovery Act of 2020" to "Small Business Recovery and Stimulus Act" throughout; in Subsection A, after the first occurrence of "Small Business Recovery and Stimulus Act", deleted "The authority shall review all small business recovery loan applications in the order in which the completed applications were received and shall provide a determination to the applicant as soon as practicable" and added "The authority may designate one or more application periods and shall review small business recovery loan applications received in each application period in the order in which the completed applications were received and shall provide a determination to the applicant within a reasonable time period after review.", after "qualifying small business", deleted "meets the requisite creditworthiness" and added "satisfies credit and identification criteria", and after "provided that the authority", deleted "shall not create additional requirements for eligibility other than those provided by that act" and added "may issue rules to permit a business that does not have a record of actual losses, but can otherwise satisfy the requirements of the Small Business Recovery and Stimulus Act, to apply for a small business recovery loan"; in Subsection B, after "evaluate", deleted "the creditworthiness of an applicant" and added "an application", and after "from the applicant", deleted "which may include an independent credit reporting agency report when available" and added "as well as third-party credit and identification reports"; deleted former Subsection C and redesignated former Subsections D and E as Subsections C and D, respectively; in Paragraph C(1), after the first occurrence of "amount", changed "equal to two" to "not to exceed three", after "business's average", deleted "adjusted", after "monthly business expenses", deleted "from the previous calendar or fiscal year" and added "as determined by the authority", and after "no greater than", changed "seventy-five thousand dollars ($75,000)" to "one hundred fifty thousand dollars ($150,000)", in Paragraph C(2), after "shall require that", deleted "the loan recipient", in Subparagraph C(2)(a), added "for a loan recipient that is not a non-employer business, the recipient shall", added item designation "1)", in Item C(2)(a)1), after "compensation for", deleted "employees" and added "an individual", and added new Item C(2)(a)2), added new Subparagraph C(2)(b) and redesignated former Subparagraphs C(2)(b) and C(2)(c) as Subparagraphs C(2)(c) and C(2)(d), respectively, in Subparagraph C(2)(c), added "the loan recipient", in Item C(2)(c)2), after "loan application", added "and all statements and certifications made in the loan application", deleted former Item C(2)(c)3) and redesignated former Items C(2)(c)4) and C(2)(c)5) as Items C(2)(c)3) and C(2)(c)4), respectively, in Subparagraph C(2)(d), added "the loan recipient", and after "Section", deleted "7 of the Small Business Recovery Act of 2020" and added "6-32-7 NMSA 1978, in Paragraph C(3), after "secure a loan", added the remainder of the paragraph, and in Paragraph C(4), after "no later than", changed "December 31, 2020" to "May 31, 2022"; and in Subsection D, after "administration of", deleted "this" and added "Small Business Recovery and Stimulus Act".
Temporary provisions.
— Laws 2021, ch. 5, § 8, provided that for any small business recovery loan provided pursuant to the New Mexico Small Business Recovery Act of 2020 made prior to March 3, 2021, the New Mexico finance authority shall permit the recipient of that loan to refinance the loan subject to terms consistent with Laws 2021, ch. 5.