State gets millions in federal funds to help disadvantaged businesses

The New Mexico Economic Development Department has received the first $22.4 million installment in a 10-year, $74.4 million allocation from the U.S. Department of Treasury’s State

Small Business Credit Initiative to boost capital assistance and invest in socially and economically disadvantaged businesses.

The department will deposit $13.4 million into a new venture capital/equity program and $9 million into an existing Collateral Assistance Program, department spokesman Bruce Krasnow said.

The funding will primarily focus on business owners who are socially and economically disadvantaged individuals, referred to as SEDI. Economic Development retained Avivar Capital to analyze small-business equity needs in New Mexico and advise the venture capital equity program.

“The outreach EDD undertook for the strategic plan shows that access to capital is one barrier in New Mexico that inhibits very small businesses, and those with other disadvantages, from thriving and achieving success,” Economic Development Department

Secretary Alicia J. Keyes said in a news release. “Thanks to this federal grant, the state now has an opportunity to better assist these businesses.”

The Collateral Assistance Program boosts private lending to small businesses by bridging collateral requirements at banks and financial institutions. The program gives preference to business owners who are women, veterans, ethnic minorities or part of other underserved groups.

This federal initiative comes through the Small Business Jobs Act of 2010 that was amended by the American Rescue Plan Act of 2021.