About New Mexico SBIC
The New Mexico Small Business Investment Corporation was created in 2000 by legislation based on a bill introduced by Senator Don Kidd (R-Carlsbad). The New Mexico Small Business Investment Act, NMSA §§58-29-1 et. seq., established initial capitalization for the corporation in 2001 at one-quarter percent of the Severance Tax Permanent Fund (STPF), then at $9.6 million.
Since 2001, capitalization of the NMSBIC has been increased several times and is now at two percent of STPF.
Background and Purpose
The initial purpose of the corporation was to create new job opportunities by making equity investments in small businesses in the state that were seeking U.S. Small Business Administration (SBA) or USDA loans for land, buildings or infrastructure. However, after an analysis indicated other capital needs, the NMSBIC recommended statutory changes that would allow it to fill those gaps.
The NMSBIC still lacked the means to deliver needed capital to individual businesses. In 2001 and again in 2002, legislation was amended to allow the NMSBIC to form legal contracts with professional financial organizations that would efficiently deliver capital funds to targeted businesses. The first formal lending relationship was established with ACCION New Mexico (now known as DreamSpring) in 2003. Since then, NMSBIC has formed contractual relationships with other organizations. Loans are arranged and delivered by WESST, The Loan Fund, DreamSpring, LiftFund, Homewise, RCAC, the New Mexico Mortgage Finance Authority, and the Ventana Fund. Equity investments, consisting of seven strategic funds, are managed by Flywheel Ventures, New Mexico Community Capital and Verge Funds.
Goals
While the overall mission of the NMSBIC is to implement the New Mexico Small Business Investment Act, the corporation has several distinct goals:
Expand job creation and retain the state’s employee base by providing financial support to small businesses in New Mexico.
Preserve and protect the capital base entrusted to it by maintaining a diversified portfolio that mitigates investment and lending risks, while being mindful of the targeted economic development investment role mandated by legislation.
Identify unmet capital needs and act as a catalyst to create or expand equity or debt delivery systems to meet those needs.
Leverage its capital base to attract additional investors to New Mexico-based funds.
Seek out and maintain delivery systems that allow it to act as a cost-effective conduit of capital.
Structure
The NMSBIC is a nonprofit New Mexico corporation exempt from taxation under §501(c)(4)of the internal revenue code. NMSBIC operates on a fiscal year beginning July 1 and ending June 30. It is managed by a board of directors consisting of six members appointed by the Governor, in addition to the State Treasurer and the State Investment Officer or their designees. Board meetings are open to the public.