June 14, 2022
How to Get a Small Business Loan in New Mexico
Whether you own a small business in the Land of Enchantment or plan to launch one, small business loans can help you out. This blog post will dive deep into everything you need to know about small business loans in New Mexico.
How to Use Small Business Loans in New Mexico
Most New Mexico small business loans are flexible. Once you receive the funds, you can use them to cover virtually any expense that will allow you to run or grow your business. The most common uses for business financing include:- Startup costs
- Commercial real estate
- Equipment and machinery
- Inventory and supplies
- Payroll
- Taxes
- Insurance
- Refinancing
- Debt consolidation
- Expansion or acquisition costs
Types of Small Business Loans in New Mexico
There is no shortage of small business loans in New Mexico. While some are easy to get and offer fast funding, others have strict eligibility criteria and longer funding times. When you shop around for funding, you may encounter these loan options.Commercial Real Estate Loan
Often referred to as a commercial mortgage, a commercial real estate loan can help you finance land or property for your business, like an office, warehouse, hotel, or restaurant. Interest rates for commercial real estate loans vary, and terms usually range from five years or less to 20 years.Small Business Loans
Banks, credit unions, and online lenders offer small business loans. As long as you have a good credit score, you may qualify for low rates and favorable terms. You’ll receive a lump sum of money upfront and repay it over time through fixed monthly payments upon approval. Bank loans typically come with terms ranging from a few months to several years. However, they usually take long to qualify for, as the application process is more complicated.Equipment Loans
Equipment loans can come in handy if you need equipment like computers, tractors, or ovens to run your business. You can use equipment loan funds to purchase or lease any type of equipment. Since equipment loans are secured loans, they’re pretty easy to get. Their downside, however, is that the lender will have the right to seize the equipment if you default.SBA Loans
SBA loans are backed by the U.S. Small Business Administration and offered by SBA-approved lenders. There are many types of SBA loans, such as SBA 7(a) loans, SBA Express loans, SBA 504 loans, SBA microloans, and SBA disaster loans. To get approved for an SBA loan program, you’ll need to meet strict criteria and complete a lengthy application. Depending on your situation, you may be able to receive up to $5 million in funding with repayment terms of up to 25 years.Line of Credit
A line of credit is a flexible form of financing. You’ll be able to withdraw funds whenever you’d like, up to a set credit limit. Once you pay back what you borrowed plus interest, those funds will become available again. While lines of credit don’t offer credit card rewards like cashback and travel points, they tend to come with lower interest rates and larger amounts.Invoice Factoring
Invoice factoring gives you access to fast cash in exchange for some or all your unpaid customer invoices. You sell your invoices to a third-party factoring company at a discount. The company will then collect payments on your behalf, usually within 30 to 90 days. Most likely, you’ll pay a factoring fee or discount rate that may be anywhere from 1% to 5%.Microloans
Offered by the SBA and mission-based nonprofit organizations, microloans are small loans of up to $50,000. If you’re having trouble qualifying for traditional business financing, you may want to look into microloans. They can help you build your credit and even provide you with resources that will help you launch or grow your venture.Resources for New Mexico Small Business Owners
As a small business owner in New Mexico, these resources may be helpful.- New Mexico Small Business Development Center (SBDC): New Mexico SBDC offers various services to entrepreneurs and small business owners throughout the state. Whether you need help with your business plan, taxes, marketing, human resources, or anything else, SBDC may be valuable.
- Santa Fe and Northern NM SCORE: SCORE offers free, confidential business advising services via Zoom, phone, and email. The organization also hosts a variety of workshops for startups and established small business owners.
- New Mexico National Association of Women Business Owners (NAWBO): NAWBO’s New Mexico chapter supports female entrepreneurs. There are several chapters, national events, and online tools.
- Activate New Mexico: Activate New Mexico is a community of entrepreneurs and mentors in New Mexico. It offers training workshops, an online community platform, a free monthly startup office, and invitations to pitch competitions and private business events.