The application window for the Small Business Recovery Loan Fund program is about to close. Authorized by the State of New Mexico and available through the New Mexico Finance Authority, the Small Business Recovery Loan program offers loans of up to $150,000 to businesses that were negatively impacted by the pandemic. Applications must be submitted by early- to mid-December in order for a loan to close by the program’s deadline of December 31, 2022.
According to the New Mexico Finance Authority, most New Mexico businesses that were impacted by the pandemic are eligible. Businesses that received a Small Business Recovery Loan in 2020 are eligible to apply to refinance their loan to receive a larger amount and a longer loan term.
The interest rate of the Small Business Recovery Loan is pegged to prime; it is equal to one-half of the Wall Street Journal prime rate on the date the loan is closed. (In mid-November of 2022, the WSJ prime was 7 percent, resulting in loan interest of 3.5 percent.) The interest rate is fixed for the term of the loan.
Interest does not accrue for the first year, and no payments are due in the first year. Interest-only payments are due on the second and third anniversaries of the loan. After the third year, principal and interest payments are due monthly, although some borrowers may be able to obtain an alternative payment schedule. The loan term is ten years unless a shorter term is requested by the applicant. The loan may be paid off in advance with no pre-payment penalty.