A new $200 million state grant program designed to help businesses cover mortgage and rent expenses coming out of the COVID-19 pandemic is slated to open Tuesday.
The LEDA Recovery Grants Program will provide COVID-impacted employers with grants of up to $100,000 per business location, according to information provided by the New Mexico Economic Development Department and New Mexico Finance Authority in a webinar Thursday.
Marquita Russel, CEO of the New Mexico Finance Authority, said funds will be allocated by need rather than on a first-come, first-served basis, and will be targeting businesses looking to add employees back as restrictions continue to loosen.
“The purpose of the program is to bring you back to pre-pandemic levels,” Russel said.
The program was one of several pandemic relief programs signed into law during the 2021 Regular Session. House Bill 11 temporarily modifies the Local Economic Development Act to allow for grant funding designed to help struggling businesses with rent, mortgage or lease obligations.
Russel said funding will be distributed based on a formula looking at the percentage of revenue lost from 2019 to 2020, the number of full-time workers who are slated to be added after April and the wages they will be paid.
Russel said businesses must be prepared to create jobs to receive grant funding.
“If you’re not going to be in a position to hire employees or to add more hours for your existing employees, this isn’t a program that’s going to work for you,” she said.
Funds may be used to reimburse businesses for rent, lease or mortgage payments they’ve made. Russel said businesses operating out of a house cannot use the funds toward home mortgages.
To qualify, businesses must demonstrate a decline in revenue during at least one comparable quarter from 2019 to 2020. Russel said the program is open to businesses and nonprofits, provided they have fewer than 75 employees.
Russel said organizations have a variety of ways to demonstrate eligibility, from CRS reports filed with the New Mexico Taxation and Revenue Department to bank and billing statements.
“We want to make sure that all businesses are given the opportunity to apply,” Russel said.
At least $150 million will be available in the initial round, with the opportunity to add funding depending on the success of the program. Russel said the initial pool of money will be split, with $50 million set aside for organizations in rural parts of New Mexico, while the remaining $100 million goes toward urban areas.
Russel added that fraud has been a challenge for grant and loan programs in other states, and said New Mexico will require applicants to verify their identities.
“In order to protect the state’s investment, we want to make certain that the people that are accessing the funds are indeed New Mexico businesses,” she said.
Because the applications won’t be reviewed in the order they’re received, Russel encouraged businesses to take their time with the application. Organizations will have until June 15 to submit applications.
For more information on the program and rules on how to apply, visit www.nmfinance.com.