NM Collateral Assistance Program (CAP) 2.0

As part of the American Rescue Plan Act (ARPA), signed into law by President Biden in 2021, Congress has allocated $10 billion to increase small businesses access to equity and debt capital through the State Small Business Credit Initiative (SSBCI 2.0) program. Administered by the U.S. Department of Treasury, the funds are distributed to each state, territory, and Tribal jurisdiction. EDD is administering New Mexico’s SSBCI 2.0 allocation.

To support business growth in New Mexico and to create and retain jobs, EDD encourages banks and other financial institutions to make loans to small businesses in underserved markets. EDD can pledge cash to cover a collateral shortfall of a loan to enable financing that otherwise might not be available to a small business.

• Preference is given to business owners who are women, US Veterans, ethnic minorities, or part of other socially disadvantaged groups.
• Special focus is on (but not limited to) projects in industries related to: intelligent manufacturing, sustainable & green industries, value-added agriculture, outdoor recreation, film & media located in rural areas.

Eligible borrowers must meet these criteria

• Business purpose is one of the industries listed in the North American Industry Classification Systems (NAICS) codes list.
• Business is considered a “small business” under the U.S. Small Business Administration.
• Employs 750 employees or fewer full-time equivalents.
• The business is located in New Mexico.

Loan proceeds can be used toward the following

• Any tangible asset purchase, including construction, renovation, or improvements of an eligible place of business
• Start-up costs
• Working capital
• Franchise fees
• Equipment
• Inventory
• Bridge loans needed prior to the borrower obtaining permanent financing or support
• Non-owner occupied construction loans:
  • Industrial, commercial, residential, land development, and farm loans allowed
  • $500,000 max loan supported — maximum $250,000 CAP amount

Program Highlights

• Cash support up to 50% of the principal based on qualifying criteria for under collateralized loans.
• Preference is placed on businesses located in rural areas, minority-owned, veteran-owned, job creation, generates income from outside of the state.
• The initial step in the process is for the borrower to apply for a loan through a CAP-approved lender to determine if collateral assistance is needed. If needed, the lender will request CAP support from EDD.
• Prior to issuance of a loan, the participating lender submits a CAP 2.0 request to EDD.
• Once approved by EDD, CAP 2.0 approval is sent to Lender. This commitment can be called upon for up to 90 days after issuance.
• Once the loan is finalized, EDD funds the CAP 2.0 contribution. A separate account is opened for each loan that is enrolled in CAP.
• Within 15 business day of loan closing the lender submits the final loan information and notifies NMEDD FDT the loan was funded.

Frequently Asked Questions

Program Documents

For more information about the program, please contact Federal Grants Coordinator Kelly Byrne at Kelly.Byrne@edd.nm.gov.

Enrolled Lenders

Following is a list of actively enrolled lending institutions in the Collateral Assistance Program. The Program is not limited to these institutions, EDD is actively enrolling lenders and will update this list as more lenders are enrolled.

• Sandia Area Federal Credit Union
• Southwest Capital Bank
• Sunward
• WaFd Bank
• WESST
• Western Bank
• Western Commerce Bank

Lender Enrollment

To enroll in the program as a lender, please fill out and submit the Lender Participation Application:

Loan Application

On a per project basis the following application will need to be filled out and submitted by the lender. Please note: applications must be submitted by the lender.