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Loan Guarantee Programs

Small Business Administration (SBA)
Many banks will only extend loans for a business start-up with an SBA loan guarantee. The SBA has an office in Albuquerque (505-766-1870) and extensive web pages. The SBA has several programs to guarantee bank loans. The criteria for obtaining an SBA bank loan is similar to what is needed for a regular bank loan. SBA's low-doc program for a business loan of $100,000 or less has quick turn-around time and emphasizes the credit worthiness of the borrower. Paper work is minimal. A low-doc loan is initiated by a bank. A business plan is usually required for a start-up loan request. There is a similar program for women entrepreneurs (Women's Pre-qualified Loan Program) in which SBA approval is obtained through an intermediary such as a Small Business Development Center (SBDC) before going to a bank. Loan guarantees over $100,000 (SBA's 7-A Program) require additional paperwork. Borrowers can go to an SBDC for free assistance with loan packaging for any of the SBA programs. The SBA can also guarantee a line of credit through its CAP line program. There are other services offered by the SBA as well such as export loan guarantees and bonding guarantees for contractors.

SBA loans: (for more detailed descriptions of these loans go to the SBA's web page:

7(a) Business Loan Guarantees
For credit worthy small businesses needing to borrow $100,000 or more. This program guarantees a bank loan and can provide favorable terms to the borrower as well as allow the bank to assume slightly more risk.

SBA "LowDoc" Program
For smaller businesses with loan needs of less than 1,000,000, less than one hundred employees, and annual sales that do not exceed $5 million over the past three years. These loans are bank guarantees approved primarily on the basis of credit worthiness and are available for start-ups.

Women's Pre-Qualification Program
For current and prospective women-owned businesses. These loans are bank guarantees for women entrepreneurs. The loans are initiated through an intermediary such as an SBDC and then taken to a bank with prior SBA approval.

SBA Revolving Line of Credit Program
CAPLines is the umbrella program under which the SBA helps small businesses meet their short-term and cyclical working-capital needs. A CAPLines loan can be for any dollar amount and is a bank guarantee program. SBA 504 Program (See below - CAPLines can also be used for construction purposes.

504 Fixed Asset Based Loans
For small businesses in need of financing for fixed assets such as land, buildings and equipment. A 504 carries substantially less equity requirements and better terms than an average bank loan. This loan involves a direct SBA loan with bank participation.

Enchantment Land Certified Development Corporation (ELCDC)
This is a company with an office in Albuquerque (505-843-9232) that packages a special type of SBA loan called a 504. These loans are used for fixed asset (building, land or equipment) purchases. The advantage of these loans to the borrower is that the equity investment required is less than that of regular business loans, and the term can be longer. A 504 loan involves direct SBA lending and bank participation.

Enchanted Land Certified Development Company
625 Silver SW, Suite 315
Albuquerque, NM 87102
(505) 843-9232

Certain SBA programs such as the Minority Pre-Qualification Program are not yet available in New Mexico. The SBA also has special loan programs for financing exports (click) , for defense affected industries and for financing pollution controls.

Rural Development Administration (formerly Farmers Home Administration): BUSINESS AND INDUSTRIAL (B&I) GUARANTEED LOAN PROGRAM
This agency has a loan guarantee program for business development in rural areas. It is mostly used to guarantee loans over the $700,000 SBA guarantee limit. Equity requirements and terms are favorable. A business plan and application are needed to apply. Processing takes about 60 days after receipt of the application. In addition economic development grants are available to specific entities such as utility and telecommunication companies, Indian tribes and nonprofits.

HUD Section 108 Loan Guarantees
The U.S. Department of Housing and Urban Development provides funds that can give the necessary leverage to entice and expand private investment and attract entrepreneurs and industrial businesses to New Mexico cities.

State Economic Development Department -
Energizing Your Local Economy Guide:
One of the most comprehensive pages available in New Mexico of Descriptions of a variety of loan guarantee programs. Included are descriptions of the Santa Fe Small Business Development Program; the FSA Farmer Programs; Navajo Business and Industrial Development Fund as well as numerous SBA programs and other funds.

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Last Updated on October 16, 1998