How severely is small business suffering in the coronavirus pandemic?
The New Mexico Finance Authority asked that question 14,125 times in the week or so before Christmas.
That’s how many New Mexico businesses asked for assistance from the state Small Business CARES Relief Grants program administered by the finance authority.
It distributed $100 million to 6,642 businesses as part of the program.
Grants ranged from $2,000 to $50,000, with 60 percent of the money going to urban businesses, 40 percent to rural businesses and 55 percent to the hospitality industry, including hotels, restaurants, bars and other tourism-related businesses.
Borrego’s Guitars & Music Supply Co. in Santa Fe received $10,000.
“We got a small grant,” said owner David Borrego. “We got it and it was gone in an hour. I have suppliers waiting to get paid, and it secures a roof [over our head] for a few months.”
Borrego said he would be “able to sleep at night” if the grant had been $40,000. Earlier, he had gotten a $21,000 loan from the New Mexico Finance Authority.
“The state has stood up. The feds not so much,” he said.
Santa Fe Desert Chorale received $15,000. Like all performing arts groups in Santa Fe, it has had no theater ticket revenue since the pandemic began.
“This grant really helps us just keep the light on and keep our very small staff employed as we work toward the future,” said Emma Marzen, the chorale’s executive director. “It has been incredibly challenging for us. We lost over $200,000 in ticket revenue just in summer. This grant gives us breathing room to keep us going.”
The state used an equation to draw the line between hardship and severe enough hardship to get funded.
“The profit/loss during the pandemic was divided by the number of employees [at a business],” said Marquita Russel, CEO of the New Mexico Finance Authority, which provides financing to a wide variety of entities throughout the state.
Recipients had to have fewer than 100 employees and be a sole proprietorship owned by a New Mexico resident, or a corporation or partnership with at least 51 percent New Mexico ownership.
“Those that were the hardest hit were funded,” Russel said. “That left out a lot of folks. The biggest issue is we did not have enough money to fund all of the businesses that applied.”
Joseph’s Culinary Pub in Santa Fe was one of the applicants that did not receive funding. Neither did Santa Fe Spirits.
“As you can imagine, we are devastated,” Joseph’s general manager, Starr Bowers, said in an email. “We have been operating this business with six people for the last couple of months. We were hoping that this grant money would help us to rehire some staff. … It just took us out at the knees a bit to have hope and then go back to feeling like we have none.”
Bowers, Santa Fe Spirits owner Colin Keegan and New Mexico Restaurant Association CEO Carol Wight said no reason was given to applicants who were not funded.
“For those that [received] the grant, it’s very valuable,” Wight said. “It will help them survive another month or two. For those that didn’t get it, they are wondering what the hell happened.”
The state Legislature in November allocated $100 million of the state’s $319 million federal CARES Act allotment to the Small Business CARES Relief Grants program. The first grants were sent Dec. 18.
“You’ve got to hand it to the Legislature and governor to put this kind of puzzle together,” Russel said. “I’ve been around New Mexico for 20 years. I’ve never seen money going out in statewide funding like this.”
The finance authority has not calculated how many Santa Fe businesses received the grant.
“I don’t think it’s going to solve all the problems, but it definitely is a good start,” said Bridget Dixson, CEO of the Santa Fe Chamber of Commerce.
New Mexico Small Business Development Center Director Brian DuBoff believes the grants were “pretty well designed” in just a few weeks.
“In terms of public policy, this is a pretty good program they came up with,” DuBoff said. “It’s too bad it happened so late in the year. A lot of businesses closed already. … These funds will be critical to the survival of many of our New Mexico small businesses. For a business with a few employees, it does add up significantly and does improve their chances for survival.”
For the applicants who did not get grants, DuBoff said the U.S. Small Business Administration’s Economic Injury Disaster Loan program is still open.
“That has been one of my favorite tools because of the terms,” he said. “It’s not a grant. It’s not free money. But it is very generous with 3.75 percent, 30 years. You can get some significant funding, and there’s a 12-month deferral [on payments]. It’s a direct loan from the SBA.”