Beyond PPP: State program helps businesses
Zero-interest loan can be for land, infrastructure
Like a lot of companies in the aerospace industry, Albuquerque’s Vibrant Corp. found itself without many customers when the COVID-19 pandemic reached New Mexico in March.
“Your customers just sort of dry up temporarily,” said Bill Hoermle, vice president of finance and administration for the research firm, which uses proprietary technology to test airplane parts and components.
In addition to applying for federal aid through the U.S. Small Business Administration’s Paycheck Protection Program and Economic Injury Disaster Loan program, Hoermle said the company went through the state Economic Development Department’s zero-interest loan program.
Vibrant hadn’t received the loan as of Thursday afternoon, but Hoermle said he’s expecting the $304,000 loan to cover the lease for the company’s building on Adams Street NE in Albuquerque, allowing the company to keep more of its employees on staff.
“It gives us a safety net and bridge into the future,” Hoermle said.
Vibrant is one of five New Mexico companies — along with La Puerta Originals and Descartes Labs in Santa Fe, Old Barrel Tea Co. in Albuquerque and Noisy Water Winery in Ruidoso — to be approved for such a loan so far, according to the state economic development office. The five approved loans total around $1.27 million.
While the total is a relatively small fraction of the money given out through the federal Paycheck Protection Program, New Mexico Economic Development Cabinet Secretary Alicia Keyes said the state programs give qualifying companies a bit more flexibility than the federal program does.
“I think that the SBA PPP program can be daunting for companies,” Keyes said.
The no-interest loan program is one of two state economic development programs that EDD erected hastily in March to help businesses adjust to the chaos brought on by the pandemic.
Keyes said the state loan program launched on March 12, before the federal CARES Act established the PPP.
She added that the state’s LEDA program, which provides grants for qualifying companies that are expanding or relocating, was allowed to administer no-interest loans under a public health order signed by Gov. Michelle Lujan Grisham.
Companies must qualify under the state’s criteria, though Keyes said they don’t need to have applied for LEDA funding in the past.
Unlike the PPP, where 60% of the loan must be spent on payroll expenses, Keyes said funding through the state loan program can be used for land, building and infrastructure, making it a useful counterpart to the federal program.
“I think that it’s really going to help New Mexico companies remain viable,” Keyes said.
Additionally, the economic development unveiled a loan guarantee program in March. More recently, the New Mexico Senate passed Senate Bill 3, which establishes a separate loan program to aid small businesses and local governments,
Overall, Keyes said the slate of economic development proposals is designed to put New Mexico’s economy, which has been hammered by the pandemic, on more solid footing going forward.
“We have space, we have quality of life, we have been aggressive in containing the virus,” Keyes said.