Finance Development

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 U.S. Department of Treasury, the funds are distributed to each state, territory, and 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.

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 U.S. 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 construction, renovation or 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

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 areas, minority-owned, veteran-owned, job 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?

No. Collateral properties must be at least 51% owner occupied.

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:

For more information about the program, please contact EDD CAP Manager and Financial Coordinator Sam Collins at Sam.Collins@edd.nm.gov.

Enrolled Lenders:

Following is a list of actively enrolled lending institutions in the Collateral Assistance Program. The Program is not limited to these institutions, EDD is actively enrolling lenders and will update this list as more lenders are enrolled.

Bank of Clovis	Century Bank	DreamSpring
Enterprise Bank & Trust	First American Bank	First Financial Credit Union
First National Bank	First New Mexico Bank Las Cruces	First Savings Bank
James Polk Stone Community Bank	Lea County State Bank	Lift Fund New Mexico
The Loan Fund	Main Bank	Native Community Capital
Pinnacle Bank	Pioneer Bank	RCAC
Sandia Area Federal Credit Union	Sandia Laboratory Federal Credit Union	Southwest Capital Bank
Tierra Del Sol Housing Corporation	WaFd Bank	WESST
Western Bank	Western Commerce Bank

Lender Enrollment:

To enroll in the program as a lender, please fill out and submit the following documents to Sam.Collins@EDD.nm.gov.

Loan Application:

On a per project basis the following application will need to be filled out and submitted by the lender. Please note: applications must be submitted by the lender.

Loan Enrollment Application Example