Economic Impact

NMSBIC Lending Highlights Fiscal Year 2023

The New Mexico Small Business Investment Corporation (NMSBIC) is a cost-effective way to provide capital to the State’s small businesses, which are a primary source of job creation. NMSBIC funds have allowed state businesses to create or retain more than 24,400 jobs since 2001.

NMSBIC loans and equity investments also benefit the state in the form of state income tax, sales tax, and gross receipts tax revenues.

Read the UNM Bureau of Business and Economic Research (BBER) report on the Economic Impacts of the NMSBIC published in March of 2017.

A Loan Program Fills a Void in Small Business Lending

NMSBIC’s greatest success has been its support of nonprofit lenders, which have played an important lending role as traditional banks have reduced lending to small businesses. NMSBIC funds committed to nonprofit lending organizations have resulted in $222 million in more than 7000 loans to small businesses—many of which would not qualify for traditional loans—and contributed greatly to job creation and retention. Furthermore, Loan Program earned interest has exceeded loan losses, resulting in a net financial benefit to the NMSBIC in addition to the stimulative economic impact generated by the program.

Loan Program partners include The Loan Fund, DreamSpring, and WESST; with LiftFund, Homewise, RCAC, Ventana Fund, and Clearinghouse CDFI added since 2019. Lending provided by these organizations has retained housing, education, social services and other critical services in the state’s smaller communities. In addition to providing much-needed small business lending, lending partners that are nonprofits also provide small business technical assistance that may include business planning and setup of accounting systems. Loans typically range from $2,500 to $250,000 and have been made in 31 of 33 New Mexico counties.

Equity Program Changing Focus

NMSBIC helped create nine New Mexico-based equity funds that have attracted nearly three times the amount of NMSBIC’s commitment from other sources. These funds target New Mexico-based businesses in every stage of development, from seed and early stages to growth and maturity stages.

The nine funds have made equity investments to 48 New Mexico companies. Most funds invest in very early stage or early stage companies, often startups that could not attract capital from banks or larger equity funds.

Since 2008, with the onset of the financial crises, the NMSBIC has experienced investment losses from its Equity Program. Equity investment losses have been declining in recent years, and several new companies are growing and prospering with equity capital provided by NMSBIC.

In the current environment, the NMSBIC is working to reduce the concentration of equity investments and is focused on expanding the Lending Program in order to achieve a more balanced level of risk for the organization and address a void in small business lending that exists throughout the state.