A bill extending financial relief opportunities to those hit hardest by the COVID-19 pandemic is on its way to the governor’s desk for a signature.
The House of Representatives on Thursday voted 51-17 to approve Senate Bill 3, which offers long-term, low-interest loans up to $150,000 to eligible New Mexico businesses and nonprofits.
The loans can be used for capital expenses, including making alterations to property to adapt to the challenges of the pandemic, such as building an outdoor dining area at a restaurant.
The money will go to businesses whose net revenue was $5 million a year or less based on 2019 figures. The first year of the loan is interest free.
Rep. Marian Matthews, an Albuquerque Democrat who was one of the bill’s sponsors, said the measure is an extension of a similar bill that lawmakers passed during a special session in June.
That legislation created a $400 million loan program to offer low-interest loans to struggling businesses.
SB 3 increases that amount to $500 million and allows businesses to apply for a loan through May 2022.
The bill will rely on funds from the state’s Severance Tax Permanent Fund, which is derived from payments for oil, gas and natural gas transported out of the state.
Some House Republicans voiced concern about diminishing that fund. They also noted that New Mexico businesses borrowed only $40.5 million from the initial $400 million fund last year — primarily because the requirements to obtain a loan from the original program were restrictive.
One barrier, Matthews told House members Thursday, was businesses had to demonstrate a 30 percent gross revenue decline in both March and April of 2020.
Another challenge was a prerequisite that those businesses be at least 80 percent owned by New Mexico residents.
With SB 3, businesses only need to prove that they took a significant financial hit during the pandemic, with no specifics attached in the legislation as to how much of a loss they took.
And businesses must be 51 percent owned by state residents.
The New Mexico Finance Authority will review the loan applications, administer the loans and follow through with collection procedures if businesses default on the loans, Matthews said.
She said that should allow more businesses outside the “original target” entities to apply for the loans.
While he voted for the previous legislation, Rep. Jim Townsend, R-Artesia, said he would not support SB 3.
“This just enables the current administration to keep this state on lockdown longer,” said Townsend, citing nearly yearlong public health orders initiated by Gov. Michelle Lujan Grisham at the start of the pandemic.
Townsend and other Republicans in both the House and Senate have called for the governor to reopen businesses and send children back to public schools.
Matthews said the state’s economy needs financial stimulus plans.
“Many businesses need help to survive,” she said.
According to the New Mexico Finance Authority, 890 businesses applied for and received funds from the original recovery fund by the end of 2020.
