US (NM): Loan system for microbusinesses approved

Small cannabis operators looking for assistance got a boost Tuesday when lawmakers in the New Mexico Finance Authority Oversight Committee approved a measure to provide loans up to $250,000 to those entrepreneurs. “There are no other sources of capital available to these microbusinesses,” Marquita D. Russel, CEO of the New Mexico Finance Authority, said after the vote. “It will make a big difference to those applying for microbusinesses.”

The move came about six weeks after the committee rejected a similar proposal that lacked clarity regarding terms and rules governing the loan. This time around, Russel provided a nine-page rule document with specifics about the deal, targeted to be ready by February or March.

Among the new specifics: While loans of up to $250,000 will be available, Russel said she thinks the average loan will be around $100,000. Loan terms cover five years. A minimum of a 5 percent equity requirement will be put in place, and those seeking loans have to provide a personal guarantee of repayment. Also, applicants have to provide a business plan with at least three years of financial projections. Furthermore, interest rates will be 2 or 3 percent, depending on the amount of the loan.

The loans are aimed at capital initiatives, including the purchase, rental, or creation of buildings and greenhouses; lighting, security, and irrigation systems; and payments for utilities and marketing efforts.

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