NEW MEXICO (KRQE) – New rules could mean more New Mexico small businesses qualifying for federal loans without being on the hook to pay them back. Many small businesses immediately applied for the Paycheck Protection Program when the state shut down for the COVID pandemic. And now with more flexibility and forgiveness, the state is urging businesses to sign up.

“Up to date, we’ve had over 20,000 businesses apply and that’s pushing $2.2 billion into the New Mexico economy, so we really want to urge businesses to apply by June 30 if they haven’t,” said Alicia Keys the Cabinet Secretary for the state’s Economic Development Department.

Keys said the changes to the program mean more of the money coming to New Mexico will stay here and not have to be repaid. The changes include more time for businesses to restore their pre-COVID employee count, which has been extended to December 31.

Businesses also have more flexibility in how their PPP dollars are spent. Initially, employers had to spend 75% of the loan on payroll, which has been changed to 60%. And lastly, the loan term has changed from two years to five years.

We spoke with the owner of Java Joe’s downtown who applied for loans when the shutdown began to weigh in. “I got mine early because I was kind of under the impression that if you didn’t act quickly you know, the coffers might be empty when you go to them so, I have until July 1 technically. I would love to see that carry into other types of loans,” said Michael Phlieger.

The state says the changes will really help smaller businesses that spend more on overhead than payroll. The state says there’s still $129 billion left in the fund for PPP loans.

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