At a time when banks are loath to lend money to other banks, New Mexico’s rural entrepreneurs may wonder if it’s even worth trying to obtain the credit they need to stay in business.
That’s where the Small Business Administration and its partners come in with programs to help launch and build rural businesses and to help rural innovators overcome the special problems posed by distance from customers, markets and workers and the lack of a telecommunications infrastructure.
SBA’s financial assistance consists of guarantees to banks to share the risk of lending to entrepreneurs. Just this year the agency instituted the Rural Lender Advantage initiative to foster economic development in rural areas by making it easier for smaller community banks to partner with the SBA to finance small businesses. With a maximum loan amount of $350,000, expedited approval, limited documentation requirements and the federal government’s guarantee that the bank won’t lose its entire investment in case of default, this tool makes community banks more willing to help New Mexico’s rural entrepreneurs pursue their business goals.