Demand Rises For New Mexico Pandemic Small Business Loans

FILE - In this March 30, 2021 file photo, President Joe Biden speaks after signing the PPP Extension Act of 2021, in the Oval Office of the White House in Washington.  The government's key COVID-19 relief program for small businesses has run out of money. The Small Business Administration said Wednesday, May 5,  that the Paycheck Protection Program has been exhausted. As of Sunday, the PPP had given out nearly 10.8 million loans worth more than $780 billion since April of last year.   (AP Photo/Evan Vucci, File)
FILE - In this March 30, 2021 file photo, President Joe Biden speaks after signing the PPP Extension Act of 2021, in the Oval Office of the White House in Washington. The government's key COVID-19 relief program for small businesses has run out of money. The Small Business Administration said Wednesday, May 5, that the Paycheck Protection Program has been exhausted. As of Sunday, the PPP had given out nearly 10.8 million loans worth more than $780 billion since April of last year. (AP Photo/Evan Vucci, File)

SANTA FE, N.M. (AP) — New Mexico state finance authorities have said that demand appears to be building for minimum-interest loans aimed at helping small businesses that lost income or experienced major disruptions during the coronavirus pandemic.

New Mexico Finance Authority CEO Marquita Russel told a panel of state legislators on Wednesday that about 865 businesses have applied for loans worth a combined $65 million since the program was overhauled in March.

Reforms to the state's small business recovery loan program, signed by Democratic Gov. Michelle Lujan Grisham in early March, doubled the maximum individual loan amount to $150,000 and broadened eligibility after businesses expressed a limited appetite for the original program.

“That program, as a result of the changes made to it, really had some traction and we’ve seen a great deal of interest,” Russel said.

The federal government has closed out its paycheck protection program that provided forgivable loans to businesses beginning in April 2020. Restaurants are still in line for federal relief under the Biden administration's $1.9 trillion coronavirus aid package.

New Mexico's small business recovery loans are repaid at half the prime rate of interest that commercial banks charge their most creditworthy customers, with zero interest accrued during the first year. Repayment installments are not due for the initial three years.

The program was originally created during a June 2020 special session of the Legislature as the pandemic took hold and state emergency health orders shut down a variety of nonessential businesses that could not operate remotely.

Under original terms of program, the state lent out $41.7 million through about 880 approved applications.

The current application period runs through May 31, 2022, on a first-come basis. The finance authority can lend up to $500 million.

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This version corrects that the name of the loan-oversight agency is the New Mexico Finance Authority, not the New Mexico Mortgage Finance Authority.