Some Chaves County banks and credit unions are now processing emergency loans and grants for small businesses, a local congresswoman confirmed Saturday.
“There has been some challenge with getting all the guidance they need from the administration, and we are working to speed that process up as much as possible,” said U.S. Rep. Xochitl Torres Small (D-Las Cruces) of the 2nd Congressional District. “But it does appear that many local lenders are able to provide those loan applications for the Payroll Protection Program.”
The U.S. Small Business Administration issued a notice Friday about the launch of the PPP lending program, as well.
Torres Small advises companies to contact their usual lenders to see if they are participating in the 7(a) SBA lending program.
Part of that lending program is now the $349 billion Payroll Protection Program, created by the Coronavirus Aid, Relief and Economic Security (CARES) Act signed into law March 27. The program can provide up to $10 million to cover eight weeks of payroll expenses as well as some additional funds for mortgage or rent payments and utilities expenses. Eligible entities are small businesses, qualified nonprofits, eligible veterans organizations and the self-employed and independent contractors.
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According to SBA announcements, the loans have a 1% interest rate, a two-year maturity term, with principal payments deferred for up to six months. If 75% of the loan is used to cover payroll expenses, then that portion can be forgiven under certain circumstances. The loans are also retroactive to Feb. 15, for employers who began laying off employees at that time.
The loans are 100% backed by the SBA and do not require collateral requirements, personal guarantees, SBA fees or tests about having credit elsewhere.
The SBA also is offering the Economic Injury Disaster Loan of up to $2 million, as well as loan advances and bridge loans. Those can be applied for directly on the SBA website, www.sba.gov. Staff with Small Business Development Centers have been directed to assist with those applications as needed, with a local SBDC director saying they have been told to contact any business receiving an initial denial to work to see what might be done to obtain an approval.
Torres Small said that she has heard from Chaves County and Roswell small businesses indicating their need for funding and interest in the relief programs. She said that has included hotels, which are considering how much to borrow, as they are required by state orders to operate only at 50% occupancy for the time being.
Torres Small said that figuring out those types of specifics is best done with trusted lenders or SBDC advisors.
“One of the challenges I have seen is a loss of capacity — lots of small businesses who need the support and are having to wait to get the assistance,” she said. “I am so grateful that small business owners are resilient and persevering and working to get the support they need. If they are having difficulties, I would deeply appreciate if they would contact our office so that we can advocate for them.”
The intent of the Payroll Protection Program is to keep people working, so Torres Small urges business owners to look into the loan programs before making a decision to lay off employees or to see if they can rehire staff.
“One of the things I have been so inspired by is the small businesses and their owners working to keep people employed as much as possible and trying to shift their business model to respond to existing needs,” she said.
An example she gave was of restaurants who have altered their businesses from on-site service to delivery of prepared meals to families or groups who need such a service.
In Chaves County, the local chambers of commerce, MainStreet Roswell and the Roswell-Chaves County Economic Development Corp. are working to connect businesses with consumers using Facebook, websites and email lists. The New Mexico Economic Development Department also has developed a new shopping portal, www.BuyNMLocal.com.
The SBA website, www.sba.gov has details about the Payroll Protection Program and the Economic Injury Disaster Loan programs.
Senior Writer Lisa Dunlap can be reached at 575-622-7710, ext. 351, or at firstname.lastname@example.org.