Opportunity Enterprise Revolving Fund

About

Application now open. The application round will close March 1, 2024.

Created by the Opportunity Enterprise Act in 2022, the Opportunity Enterprise Revolving Fund is a loan program that provides financing for building or renovation projects to increase the inventory of commercial space that will attract businesses to New Mexico, allow existing businesses to expand their operations, and achieve economic benefits for the state.

The OERF application consists of three parts:

Part 1 determines eligibility for financing;

Part 2 is the  project application, which is scored and prioritized based on specific criteria in the OERB Evaluation and Prioritization Policy: and

Part 3 is a loan application that is reviewed for financial soundness and ability to repay the loan.  Only businesses whose applications score high enough to be prioritized by the OE Review Board will be invited to submit a loan application.

Before you apply, please review the “Resources” section at the right. In particular, we recommend you review the scoring matrix in the OERB Evaluation and Prioritization Policy  to determine if your project application would be competitive.

All information provided in Parts 1 and 2 should be considered public information and subject to the Inspection of Public Records Act.

Questions?  We’re happy to help. Please call (505) 992-9687 or email OERF@nmfa.net.

Application

Application now open. Application must be submitted by March 1, 2024

Log into your existing NMFA account or request access to create an account for the OERF.

Not yet ready to apply, but interested in the program?

Please click here to provide NMFA with information about your business and your interest.

Eligibility

Both for-profit and nonprofit entities are eligible to apply.

Business types include the following:

  • domestic corporation
  • general partnership
  • limited liability company
  • limited partnership
  • public benefit corporation
  • nonprofit entity
  • other private business entity or combination of entities

Businesses need to be engaged in a project that increases the inventory of commercial space in New Mexico, while creating or expanding economic opportunity in the state.

Applicants must provide sufficient evidence that other means of financing their project are unavailable or insufficient.

Information

Following is information that may be helpful for potential applicants, but is not a list of all the requirements. The OERB and NMFA rules and policies for the program are available under the Resources section at the top right.

Loan Terms
  • The interest rate will be equal to 60% of the Wall Street Journal prime rate on the date the loan is approved, but will be no less than 3%. The interest rate is fixed for the term of the loan.
  • The loan term will be between fifteen and thirty years.
  • Interest-only payments will be due the first three years.
  • After the third year, principal and interest payments will be due monthly.
  • The loan may be paid off in advance with no pre-payment penalty.
Loan Amount

Loan amounts are not to exceed $17,500,000.

Use of Loan Funds

Loan funds may be used for purchasing, planning, designing, building, surveying, improving, operating, furnishing, equipping or maintaining land, buildings or infrastructure.

The funds must be used to create or expand economic development opportunities within the state.

Application Information

All information provided in the project application should be considered public information and is subject to the Inspection of Public Records Act.

When can I apply?

  • The application for the first round of the fund closed on July 31, 2023.
  • The application for the next round of the fund will close on March 1, 2024.
  • 25% of the total loan fund was available in the first round.
  • The remainder of the loan fund will be available in the round that closes March 1, 2024.

Is there a benefit to applying early?

The loan fund amounts are limited as listed below, therefore applying in an early round would avoid the funds already being allocated to a given county or sector. However, there is no benefit to applying early within a round. All applications will be reviewed and prioritized after the round closes.

  • No more than 25% of the total fund or $17,500,000 to any one county;
  • No more than 25% of the total fund or $17,500,000 to any one project;
  • No more than 50%  of the total fund or $35,000,000 to any one sector.

How do I apply?

  • The application is available online at nmfinance.com.
  • The application system requires that you set up an account, which will allow you to save your application in progress. This means you can work on your application, save your work, and return to the application to complete it and submit it. The application must be submitted by an Authorized Officer, as defined below.

 

 What is an Authorized Officer?

An Authorized Officer is the person authorized by the applicant as having the requisite power and authority to sign the Officer’s Certificate and legally bind the applicant to its obligations under the Loan Agreement.

 

How are “Urban,” “Rural,” and “Frontier” defined?

  • Urban is a community with a population greater than 40,000 and Class H counties (e.g. Los Alamos)
  • Rural is a community with a population under 40,000 and over 15,000
  • Frontier is a community with a population under 15,000 or Native American lands or a federally designated Colonias in New Mexico

 

Application Process

The OERF process consists of three parts: an initial eligibility screening, a project application and a loan application. The project application will be scored according to the Evaluation and Prioritization Policy. We recommend you review the scoring matrix in the Evaluation and Prioritization Policy  before completing the application to determine if  it’s worth your while to apply, i.e. Is your project a good fit for this program and will your application be competitive?

Only businesses whose projects are prioritized by the OE Review Board in the project application review will be invited to submit a loan application. The loan application will be opened to businesses in order of prioritization.

Please note that being prioritized high enough to be invited to submit a loan application does not guarantee your business will receive a loan. NMFA will underwrite your loan application according to statute and policies to determine eligibility and ability to repay the loan.

 

Required Documents

The application process will require documents evidencing project readiness, creditworthiness, and any other information requested by OERB and NMFA. Documents may include but are not limited to the following:

  • Certification from opportunity enterprise partner that proceeds will be used for
    an Enterprise Development Project
  • Ownership structure of the Eligible Applicant (for each owner detailing name,
    address, percentage ownership);
  • Eligible Applicant legal entity type and all entity formation documents, including a
    certificate of good standing from the New Mexico Secretary of State, if applicable
  • Sources and uses of investment;
  • Project planning documents including site and design plans and project budget;
  • Copy of any license, zoning, permitting or other regulatory requirements, as
    applicable;
  • Business plan or feasibility study and five-year proforma financial statements;
  • Complete list of outstanding loan(s) to the Eligible Applicant, member, partner or stockholder of the Eligible Applicant;
  • Authorization to obtain a credit report of the Eligible Applicant and the guarantor, as applicable;
  • Current balance sheet and year-to-date profit and loss statement for the Eligible Applicant, dated not more than 90 days prior to the date of Application, a fiscal year-end balance sheet, and the Applicant’s profit and loss statement for the prior three years or audited financial statements, as applicable;
  • Federal income tax return for the prior two years on all guarantors and co-borrowers, as relevant;
  • Copies of the Eligible Applicant’s federal income tax returns for the prior three years if the balance sheets and profit and loss statements are not audited by a certified public accountant;
  • Sufficient evidence that other means of financing the proposed project are unavailable or insufficient; and
  • If the Eligible Applicant is a newly created entity formed for the sole purpose of developing or operating the proposed Enterprise Development Project, the Applicant shall provide the information for the Eligible Applicant’s existing entities, if any, the Eligible Applicant personally; and
  • Any other information requested by the NMFA to evaluate the Application.
Review Process
  • Project applications are reviewed for completeness by NMFA staff.
  • Complete project applications are reviewed for eligibility and suitability by EDD and NMFA staff.
  • Eligible projects are scored and ranked according to the criteria in the Opportunity Enterprise Review Board Evaluation and Prioritization Policy.
  • The ranked project applications will then be reviewed by the OERB Project Review Board that will prioritize the project applications.
  • Prioritized project applications will go to the entire Opportunity Enterprise Review Board which will determine which projects are recommended to NMFA. An applicant whose project is recommended to NMFA will be invited to complete the NMFA loan application.
  • The loan application will be required of all applicants whose projects are recommended to NMFA by the Opportunity Enterprise Review Board.
  • The loan application will be reviewed to assess the applicant’s ability to repay the loan and will be underwritten according to NMFA policies. Loan terms will be determined in the underwriting process.
  • Please note that the loan application review process will involve a thorough examination of documents and information provided. Applicants may be asked for additional information during the underwriting process.

 

Application Prioritization

Applications will be scored and ranked according to the Opportunity Enterprise Evaluation and Prioritization Policy. A link to this policy is here.

Credit History

All applicants will be required to authorize NMFA to obtain credit reports on all owners and guarantors.

     

    Equity Requirement, Collateral, Personal Guarantees

    Equity Requirement: Applicants are required to contribute a minimum of 10% of the
    loan amount in the form of owner contributions, cash or in-kind, or down payment.

    Collateral; Loan-to-Value Requirement: Collateral must be in the form of real property, e.g. land, buildings, and equipment. The loan-to-value ratio will be up to 80%.

    Guarantees: All loans will require personal and/or corporate guarantees from one or more of the following persons:

    − a partner, or member of the Applicant
    − a joint venturer with the Applicant
    − any stockholder of the Applicant
    − the parent corporation or a partner, member, or stockholder of the parent corporation if the Applicant is a subsidiary

    OERF Concentration Limits
    • No more than $17,500,000 of the total fund may be awarded to a single project.
    • No more than 25% of the total fund ($17,500,000) may be invested in one county.
    • No single industry as defined by the two-digit NAICS code may constitute more than 50% of the total fund.
    Monitoring and Reporting

    OERF borrowers will be required to submit quarterly financial statements, and a detailed reporting package that will include:
    • Latest complete financial statements
    • Business performance report including rent rolls
    • Brief narrative on project completion status, project budget, business performance
    including occupancy data and rent rolls, (as applicable), and economic impact including
    job creation metrics
    • Certification that all representations, warranties and covenants remain true and correct
    • Certification that there has been no change in business ownership/change in control

    NMFA reserves the right to request additional information for monitoring purposes

    Other Information

    How are “Urban,” “Rural,” and “Frontier” defined?

    • Urban is a community with a population greater than 40,000 and Class H counties (e.g. Los Alamos)
    • Rural is a community with a population under 40,000 and over 15,000
    • Frontier is a community with a population under 15,000 or Native American lands or a federally designated Colonias in New Mexico

     

     

    About

    The Opportunity Enterprise Revolving Fund is governed by the Opportunity Enterprise Review Board in partnership with the New Mexico Economic Development Department, and is administered by the NMFA.

    Questions?  We’re happy to help. Please call (505) 992-9687 or email OERF@nmfa.net.

    Resources

    OERF Webinar presentation
    Sample Application - Part 1, Initial Eligibility Screening
    Sample Application - Part 2, Project Application
    Opportunity Enterprise Review Board Evaluation and Prioritization Policy, as revised 10/19/23
    NAICS Codes - Target Industries
    How to Reduce the Size of PDF Files
    2023 OERB Applications
    Opportunity Enterprise Revolving Fund Policies
    Opportunity Enterprise Review Board Rules, effective 4/25/23
    Opportunity Enterprise Act Rules, adopted by NMFA 11/17/22
    Opportunity Enterprise Act Overview
    Upcoming Opportunity Enterprise Review Board Meetings
    House Bill 7