NM Collateral Assistance Program (CAP) 2.0

Explore the New Mexico Collateral Assistance Program (CAP), helping small businesses secure loans by covering collateral gaps and improving access to financing. Home Programs and Services Business Development NM Collateral Assistance Program (CAP) 2.0 NM Collateral Assistance Program (CAP) 2.0 As part of the American Rescue Plan Act (ARPA), signed into law by President Biden in 2021, Congress has allocated $10 billion to increase small businesses access to equity and debt capital through the State Small Business Credit Initiative (SSBCI 2.0) program. Administered by the Department of Treasury, the funds are distributed to each Tribal jurisdiction. EDD is administering New Mexico’s SSBCI 2.0 allocation. To support business growth in New Mexico and to create and retain jobs, EDD encourages banks and other financial institutions to make loans to small businesses in underserved markets. EDD can pledge cash to cover a collateral shortfall of a loan to enable financing that otherwise might not be available to a small business. Preference is given to business owners who are women, US Veterans, ethnic minorities, or part of other socially disadvantaged groups. Special focus is on (but not limited to) projects in industries related to: intelligent manufacturing, sustainable & green industries, value-added agriculture, outdoor recreation, film & media located in rural areas. Eligible borrowers must meet these criteria Business purpose is one of the industries listed in the North American Industry Classification Systems (NAICS) codes list. Business is considered a “small business” under the Small Business Administration. Employs 750 employees or fewer full-time equivalents. The business is located in New Mexico. Loan proceeds can be used toward the following Any tangible asset purchase, including improvements of an eligible place of business Start-up costs Working capital Franchise fees Equipment Inventory Bridge loans needed prior to the borrower obtaining permanent financing or support Non-owner occupied construction loans: development, and farm loans allowed $500,000 max loan supported — maximum $250,000 CAP amount Program Highlights Cash support up to 50% of the principal based on qualifying criteria for under collateralized loans. Preference is placed on businesses located in rural creation, generates income from outside of the state. The initial step in the process is for the borrower to apply for a loan through a CAP-approved lender to determine if collateral assistance is needed. If needed, the lender will request CAP support from EDD. Prior to issuance of a loan, the participating lender submits a CAP 2.0 request to EDD. Once approved by EDD, CAP 2.0 approval is sent to Lender. This commitment can be called upon for up to 90 days after issuance. Once the loan is finalized, EDD funds the CAP 2.0 contribution. A separate account is opened for each loan that is enrolled in CAP. Within 15 business day of loan closing the lender submits the final loan information and notifies NMEDD FDT the loan was funded. Frequently Asked Questions Can CAP be used to support financing of investment properties? Investment property financing is limited to construction loans up to $500,000. Can CAP support business acquisitions? Yes and no. CAP can support loans for asset purchases but cannot be used to support loans to fund goodwill (the price paid for a company in excess of the business’s net asset value). Can CAP be used to support an SBA-guaranteed loan? No. CAP cannot be used to support an SBA-guaranteed loan. CAP can support a bridge loan to reduce the effective loan-to-value for an interim period until the SBA 504 can be funded and the CAP support released. Program Documents  CAP Guidebook  CAP Overview  CAP Timeline For more information about the prog

Eligible borrowers must meet these criteria Business purpose is one of the industries listed in the North American Industry Classification Systems (NAICS) codes list.