If you own a small business in the state of New Mexico or you’re considering starting a small company in the area, you are far from alone. The number of small business owners in New Mexico has continued a steady climb over the last several years, according to the Small Business Administration’s Office of Advocacy.
In 2016, New Mexico was home to more than 154,000 small businesses, with more than 336,000 employees.
The small business environment in the state offers more than 5,000 net new jobs per year, includes over 60,000 minority-owned businesses (view small business loans for minorities), and accounts for 84% of trade within the state.
The small business arena in New Mexico is primed for growth, but there are challenges that both new and established business owners face in keeping a company moving forward.
At some point, a small business operating in New Mexico will likely face a need for small business financing from outside sources. Companies must have capital available for covering business overhead expenses, expanding with a new location or updated product, and staying competitive with the help of strategic marketing efforts in the state. Each of these integral components of business comes at a cost, which, for some businesses, is not easy to cover out of current revenue.
This guide offers some direction on the types of small business financing available to business owners in New Mexico, which companies may qualify for specific financing, and when it makes the most sense to pursue one over the other.
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Small Business Loans in New Mexico
Smaller companies operating in New Mexico have the option to secure funding for a wide variety of needs with the help of a small business loan from a bank, credit union, or other small business lender. Small business loans for New Mexico businesses vary in amount and cost, but they all offer a fixed term and often lower interest than business credit cards or business lines of credit.
You should know that small business loans do come with more stringent qualification requirements than other business funding sources, including the need for steady revenue over a certain threshold, several years in business, and a strong financial track record of on-time payments and overall money management of business finances.
Below are a few New Mexico small business loan options for qualified companies:
First New Mexico Bank
Founded in 1962, First New Mexico Bank offers several banking products and services to customers throughout the state. Small business customers may qualify for business lines of credit, land loans, and equipment and inventory financing loans through First New Mexico Bank.
Commercial loans for the purchase of business property are also available, with repayment terms of up to 25 years.
First New Mexico Bank provides access to SBA loans to small businesses that meet the qualification requirements, including time in operation, annual revenue, and ability to repay based on assets of the business.
Loans through the bank must be applied for in person at a First New Mexico Bank branch location or by contacting a business lending specialist at 1-575-546-2691.
Nusenda Credit Union
Nusenda Credit Union was founded in 1936, and since that time, the financial institution has grown to serve more than 180,000 members throughout New Mexico.
The credit union offers small business lending solutions through loans and lines of credit to help cover expenses like equipment purchases, commercial real estate, working capital, and inventory. Small businesses also have access to SBA loans through the credit union, along with term loans and real estate loans when qualified.
Small businesses customers must first be members of the credit union to qualify, as well as have verifiable profit and loss statements, business asset statements, and a minimum time in operation. Small businesses may apply for a business loan through Nusenda Credit Union by visiting a branch location or calling 1-800-347-2838.
New Mexico Bank and Trust
Established in 1998, New Mexico Bank and Trust is a subsidiary of Heartland Financial, a large financial services company providing both personal and commercial financial products throughout several states. New Mexico Bank and Trust offers several lending solutions to small businesses, including SBA loans, commercial real estate loans, business lines of credit, and fixed-term loans.
The bank works with small business owners to customize lending strategies based on the revenue of the business, time in operation, and other assets that may be used as collateral for a loan. Small businesses can apply for a loan or line of credit by visiting a branch location or calling 1-505-888-6625.
First Financial Credit Union
First Financial Credit Union has a history dating back to 1937 as a community financial institution serving New Mexico residents. Small businesses have many options with First Financial Credit Union, including loans for inventory, equipment, business vehicles, and covering working capital needs. The specific terms of each business loan from the credit union depend heavily on the financial ability of the small business, including assets on hand, revenue, and time in operation.
Small businesses may apply for a loan with First Financial Credit Union by visiting a branch location or calling 1-800-342-8298.
Small Business Grants in New Mexico
Small business grants may be another viable option for companies searching for business funding. Unlike small business loans, grants do not need to be repaid. Instead, small businesses must follow the guidelines for grants they receive in terms of the work provided in return for the funding. Grants are available from several sources, including the following.
Here are some New Mexico small business grant options:
New Mexico Innovation Vouchers are available through the Office of Science and Technology of the state’s Business Development department. These small competitive grants are offers to early-stage science or technology companies to help take away some of the financial pressure of reaching their full market potential. Grants up to $2,000 are awarded to companies that qualify based on the application submitted by the small business.
New Mexico FUNDIT
Several grant opportunities exist through a collective of agencies in New Mexico to qualified small businesses under the umbrella of New Mexico FUNDIT. The collective provides financing solutions from a large pool of agencies with a single application, including some grant funding, specifically for businesses working in community development, revitalization, housing, and infrastructure. Because there are several agencies participating in the FUNDIT program, small businesses have a wide range of grant funding available, as well as widely varied application requirements.
Small Business Investors in New Mexico
Beyond small business loans and grant funding, small businesses in New Mexico may also pursue investor funding from a variety of sources. Investor funding differs from grant funding in that the amount received needs to be repaid over time. However, this repayment, unlike a small business loan, is done through giving up equity in the business.
Taking on investments from an angel, venture capitalist, or private investor may also mean giving up some management control within the business, at least for a short period of time. Investors are mostly focused on high-growth small businesses that have some aspect of technology in their products or service solutions. Here are a few investors in New Mexico able and willing to assist small businesses to receive the funding they need to grow.
Here are some New Mexico small business investment options:
As a New Mexico-based venture capital firm, Flywheel Ventures offers investor capital to early- and seed-stage small businesses in the state. The investment firm focuses on providing investor funding to entrepreneurs working in the information technology or urban systems fields, with a penchant for energy, water, infrastructure, and digital services.
The total amount of funding available varies greatly depending on the type of company, the financial need, and the resources available from the venture capitalist. Flywheel Ventures allows small businesses to submit a summary of their financing needs and product or service ideas online.
New Mexico Angels
Founded in 1999, New Mexico Angels is a group of accredited angel investors working to assist early-stage start-up small businesses throughout the state. Since its inception, the angel investor firm has funded more than $15 million in several notable small businesses.
The firm helps connect investors with business owners for the purpose of funding product development, completing prototypes, launching new products, expanding or improving management teams, or completing strategic partnerships.
Small businesses interested in funding from New Mexico Angels must be seeking between $100,000 and $500,000, have a strong business plan, and provide company valuation information along with market opportunities. All applications are submitted online.
The Verge Fund
Based in Albuquerque, The Verge Fund is a firm that brings together early-stage entrepreneurs with investors, founders, and advisors to help small businesses reach their full potential in the state. The Verge Fund leverages the $5 billion spent in research funding each year throughout New Mexico to assist small businesses in maximizing their products and services to make them marketable to a large consumer base. The investment firm focuses on seed-stage funding for high-growth small businesses. Companies interested in applying for financing with the help of the Verge Fund can contact the firm online.