A. The authority shall receive and review applications for small business recovery loans pursuant to the Small Business Recovery Act of 2020. The authority shall review all small business recovery loan applications in the order in which the completed applications were received and shall provide a determination to the applicant as soon as practicable. The authority shall make loans to qualifying small businesses; provided that funds are available and the qualifying small business meets the requisite creditworthiness, as determined by the authority. The authority shall adopt rules to govern the application procedures and requirements for disbursing loans under the Small Business Recovery Act of 2020, including requirements consistent with the purpose of that act for determining the eligibility of qualifying small businesses for loans; provided that the authority shall not create additional requirements for eligibility other than those provided by that act.
B. The authority shall evaluate the creditworthiness of an applicant based on information received from the applicant, which may include an independent credit reporting agency report when available.
C. The authority may use funding made available for the Small Business Recovery Act of 2020 to contract with a loan servicer to assist in carrying out the provisions of the Small Business Recovery Act of 2020, including determining:
(1) whether an entity meets the requirements to be considered a qualifying small business;
(2) whether a qualifying small business is eligible for a small business recovery loan; and
(3) the amount that the qualifying small business is eligible to receive for a small business recovery loan.
D. The authority shall make small business recovery loans in accordance with the following:
(1) the loan amount shall be in an amount equal to two hundred percent of the qualifying small business's average adjusted monthly business expenses from the previous calendar or fiscal year; provided that the maximum loan amount shall be no greater than seventy-five thousand dollars ($75,000);
(2) the terms of the loan shall require that the loan recipient:
(a) use a minimum of eighty percent of the proceeds of the loan for ordinary and necessary business expenses, including capital expenses, other than compensation for employees who own equity in the business;
(b) provide a written certification signed by an appropriate officer of the qualifying small business that certifies that: 1) the officer understands that the business is receiving a loan under the Small Business Recovery Act of 2020 that must be repaid by the business with interest under the terms of the loan agreement; 2) all documents submitted in support of the loan application are true and accurate to the best of the officer's knowledge; 3) the officer has a reasonable basis to believe that, as of the date of origination of the loan and receipt of the loan proceeds, the business does not expect to permanently cease business operations or file for bankruptcy; 4) prior to the issuance of the public health order issued by the secretary of health on March 23, 2020, the business was current on all obligations pursuant to the Income Tax Act [Chapter 7, Article 2 NMSA 1978], the Corporate Income and Franchise Tax Act [Chapter 7, Article 2A NMSA 1978], the Withholding Tax Act [Chapter 7, Article 3 NMSA 1978], the Gross Receipts and Compensating Tax Act [Chapter 7, Article 9 NMSA 1978] and the Unemployment Compensation Law [Chapter 51 NMSA 1978] applicable to the business's operations; and 5) all loan proceeds will be used for purposes as provided in the Small Business Recovery Act of 2020, including that no more than twenty percent of the proceeds may be used as compensation for employees who own equity in the business; and
(c) provide the authority with ongoing information relevant to the reporting requirements of the authority provided in Section 7 [6-32-7 NMSA 1978] of the Small Business Recovery Act of 2020;
(3) the terms of the loan shall not require that the qualifying small business provide a personal guarantee or collateral to secure the loan; and
(4) the application for a loan must be received no later than December 31, 2020.
E. The authority may exercise any power provided to the authority in the New Mexico Finance Authority Act [Chapter 6, Article 21 NMSA 1978] to assist in the administration of this; provided that the power is consistent with the provisions of this act.
History: Laws 2020 (1st S.S.), ch. 6, § 4.
ANNOTATIONSEmergency clauses. — Laws 2020 (1st S.S.), ch. 6, § 13 contained an emergency clause and was approved July 7, 2020.