$100M NM business grant program flooded with applicants
ALBUQUERQUE - More than 6,500 hard-hit New Mexico businesses and nonprofits are receiving an extra Christmas present: up to $50,000 in grant funding from the government.
However, because of a higher-than-expected number of applications for the program — set up by the state using federal funding — less than half of the organizations that applied will receive a grant.
"The number (of applications) that we couldn't fund was very hard for us," said Marquita Russel, CEO of the New Mexico Finance Authority, the state agency that administered the program.
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The Small Business CARES Relief Grants program was part of a larger $320 million pandemic aid package passed by state lawmakers during the recent special session.
The state program allocated $100 million from the federal CARES Act for small grants, ranging from $2,000 to $50,000, aimed at helping qualified New Mexico small businesses and nonprofits.
Russel said she expected to get about 10,000 applications. Instead the agency received 14,125 grant applications between Dec. 7 and Dec. 18, totaling around $156 million in requested funding.
In all, 6,530 applications were funded, roughly 46% of the total.
Because the pool of money was capped at $100 million, Russel said the agency worked to prioritize the businesses that demonstrated the most significant losses due to the COVID-19 pandemic.
"We're gratified that we were able to get $100 million out the door," Russel said. "That was really important to us, there's so much need."
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Russel said small businesses had to be majority-owned by New Mexico residents and have 100 or fewer employees to be eligible for a grant.
To address the businesses hit hardest by the COVID-19, the program set aside $40 million for businesses and other organizations outside of New Mexico's four largest cities. While detailed regional data is not yet available, Russel said the number of applications from rural areas matched that proportion nearly perfectly.
"That means people were getting out the word," Russel said. "... So that made me very happy."
Additionally, the program set aside funding to support New Mexico's leisure and hospitality industry, which has been among the sectors hit hardest by the pandemic.
As of November, the industry — which includes hotels, bars and restaurants — shed more than 20% of its jobs in 12 months, according to numbers from the New Mexico Department of Workforce Solutions.
Russel said fewer hotels in urban areas applied for funding than the agency expected, possibly due to the size and residency restrictions, but added that the program saw "significant" demand from restaurateurs.
Carol Wight, CEO of the New Mexico Restaurant Association, said she was glad the program prioritized restaurants and other hospitality businesses, but added it that wouldn't be nearly enough to offset the damage from the pandemic and associated shutdowns.
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"If you're not going to keep them open, then at least give them some hope that they'll be able to open at some point, and help them pay their bills at some point," Wight said.
Once applications were sorted into different tracks, Russel said the agency looked at the profit-loss ratio, divided by the number of employees, to gauge how much each company has been impacted by the pandemic.
"We understand that a small business that loses $10,000, it's a much deeper loss than that same $10,000 for a much bigger company," Russel said.
From there, funding was allocated based on the number of employees. Russel said that one surprise was that sole proprietors, who only qualify for $2,000 in grant funding, comprised more than one-third of the applicants.
To prevent fraud, the New Mexico Finance Authority reviewed bank account data and used technology to spot suspicious behavior in applications. Russel said the agency caught several instances of suspected fraud, but added that it was not widespread.
Russel said companies receiving funding should receive an email with a grant agreement that requires an online signature. Once companies complete the agreement, they should receive funding within two or three days.
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