More Flexible Spending, Dollars Set Aside for First-Time Borrowers
SANTA FE, N.M. – The New Mexico Economic Development Department (EDD) is partnering with the N.M. Small Business Development Center, the U.S. Small Business Administration and the Office of Gov. Michelle Lujan Grisham to host a webinar on the new Paycheck Protection Program (PPP) loan application, which reopens this week.
EDD encourages all business owners who still need PPP assistance to apply for the new round of money from the U.S. Small Business Administration (SBA). A total of $284 billion is available nationwide, with $35 billion specifically for first-time PPP borrowers.
EDD is hosting an informational webinar about PPP at 11:30 a.m. on Friday Jan. 15. Registration is available here.
Some 23,000 businesses in the state have already received PPP loans totaling $2.3 billion. The average employee count for the loans is 11 and the average N.M. loan is $98,630.
“The new PPP loan program allows for more flexibility in how loan dollars are spent and sets aside money for first-time businesses owners new to the program,” EDD Cabinet Secretary Alicia J. Keyes said. “Businesses who need this assistance should register for the EDD webinar and get with a lender who can submit an application as soon as possible.”
The SBA will begin processing new PPP loans this week with the first draw restricted to businesses that have not yet received PPP assistance. The first applications are also being restricted to Community Development Financial Institutions (CDFIs), which target lending to the most needy communities and business owners who may not have a banking relationship.
Three CDFIs are currently taking applications from New Mexico:
- DreamSpring. For information, call 1-800-508-7624.
- LiftFund. For information, call 1-888-215-2373
- Clearinghouse. For information, call 1-800-445-2142.
Business owners in need of free assistance with the loan application, or seeking advice about all SBA assistance and loan programs, should register for an advisory session with the New Mexico Small Business Development Center (NMSBDC), nmsbdc.org.
The NMSBDC network has locations in 20 communities throughout the state and provides free assistance to small businesses and entrepreneurs. The office can be reached at 1-800-281-7232. Due to office closing during the health emergency, those needing help are asked to go online first to register.
All other lenders will be able to help with applications “shortly thereafter,” according to the U.S. Small Business Administration, but a specific date has not yet been determined. The application process is open until March 31, 2021 or until the $284 billion authorized for the program is exhausted.
Required documents for first time PPP applications:
- Payroll report for 2019 (if applicable to your business)
- 2019 Schedule C – self-employment tax form (if applicable to your business)
- Any 1099s you received for 2019
- Quarterly Payroll Tax form 941 for every quarter of 2019 or the 944 Annual Payroll tax form (if applicable to your business)
Key PPP updates include:
- PPP borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs;
- PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
- The Program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, destination marketing organizations, and other types of organizations;
- The PPP provides greater flexibility for seasonal employees;
- Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount; and
- Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan.
A borrower is generally eligible for a Second Draw PPP Loan if the borrower:
- Previously received a First Draw PPP Loan and will, or has, used the full amount only for authorized uses;
- Has no more than 300 employees; and
- Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.