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Strict rules keep business out of New Mexico loan program

Strict rules keep business out of New Mexico loan program

SANTA FE, N.M. (AP) — Only about $20 million of a $400 million loan program for New Mexico small businesses hit by the pandemic has been approved to send out since the program began in August, according to the state agency running the program.

“We created the program, believing that about 5,000 applications would be processed. And it’s a much smaller volume than that,” said New Mexico Finance Authority CEO Marquita Russel at a presentation to state legislators Tuesday.

Low participation has saved the agency money on contractors, Russel said.

But it’s also a sign that the legislation isn’t reaching many small businesses. Fewer than 900 businesses have applied for loans under the program, which range from $500 to $75,000.


That’s despite ongoing pain in the New Mexico economy where the 11.3% August unemployment rate was far higher than the national average of 8.4%, and businesses face occupancy limits ranging from 75% for hotels to 25% for restaurants.

Hundreds of applications have been rejected.

Around 85% of those businesses that didn’t qualify for the Small Business Recovery Loan Fund failed to meet the requirement of showing a loss of at least 30% of revenue in April and May compared with the same period in 2019.

That included for-profit companies that already had “business in the hopper,” Russel said, even if they’re going broke now.

It also includes nonprofits that raise the bulk of their money during other times of the year, and there’s no flexibility in the program for businesses that are less than a year old and therefore can’t compare revenues.

The fund gives two months’ worth of operating expenses to eligible entities owned by residents at an interest rate of around 2%, with no payments required in the first year.

Investment and Pension Oversight Committee Chairman Sen. George

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Strict COVID-19 lockdowns may speed up economic recovery: IMF

Strict COVID-19 lockdowns may speed up economic recovery: IMF

WASHINGTON (Reuters) – Early lockdowns in an epidemic can substantially reduce infections, and policymakers should be wary of lifting them to jumpstart their economies when infections remain high, the International Monetary Fund said on Thursday.

FILE PHOTO: International Monetary Fund logo is seen outside the headquarters building during the IMF/World Bank spring meeting in Washington, U.S., April 20, 2018. REUTERS/Yuri Gripas//File Photo

The COVID-19 pandemic showed that government lockdowns succeeded in lowering infections, the IMF wrote in a chapter of its forthcoming World Economic Outlook, but they also contributed to the recession and hit vulnerable groups such as women and young people particularly hard.

Voluntary social distancing driven by fears of contracting the disease also contributed heavily to the recession and was unlikely to recede if lockdowns were lifted while cases remained elevated, the researchers warned.

“Addressing the health risks appears to be a pre-condition to allow for a strong and sustained economic recovery,” wrote IMF economists Francesco Grigoli and Damiano Sandri in a blog post on the research.

“Lockdowns impose short-term costs but may lead to a faster economic recovery as they lower infections and thus the extent of voluntary social distancing,” they wrote, adding that alternatives such as wearing face masks, expanded testing and contact tracing could have even lower economic costs.

The IMF research did not single out specific countries, but comes as infections are rising sharply in parts of the United States that moved to end lockdowns early amid pressure from U.S. President Donald Trump, who was determined to boost the economy ahead of the Nov. 3 presidential election.

India, second only to the United States in coronavirus infections, is also lifting most restrictions even as the pandemic rages.

The IMF said lockdowns needed to be sufficiently strict to curb infections, suggesting that “stringent and short-lived

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Strict COVID-19 Lockdowns May Speed up Economic Recovery: IMF | Investing News

Strict COVID-19 Lockdowns May Speed up Economic Recovery: IMF | Investing News

WASHINGTON (Reuters) – Early lockdowns in an epidemic can substantially reduce infections, and policymakers should be wary of lifting them to jumpstart their economies when infections remain high, the International Monetary Fund said on Thursday.

The COVID-19 pandemic showed that government lockdowns succeeded in lowering infections, the IMF wrote in a chapter of its forthcoming World Economic Outlook, but they also contributed to the recession and hit vulnerable groups such as women and young people particularly hard.

Voluntary social distancing driven by fears of contracting the disease also contributed heavily to the recession and was unlikely to recede if lockdowns were lifted while cases remained elevated, the researchers warned.

“Addressing the health risks appears to be a pre-condition to allow for a strong and sustained economic recovery,” wrote IMF economists Francesco Grigoli and Damiano Sandri in a blog post on the research.

“Lockdowns impose short-term costs but may lead to a faster economic recovery as they lower infections and thus the extent of voluntary social distancing,” they wrote, adding that alternatives such as wearing face masks, expanded testing and contact tracing could have even lower economic costs.

The IMF research did not single out specific countries, but comes as infections are rising sharply in parts of the United States that moved to end lockdowns early amid pressure from U.S. President Donald Trump, who was determined to boost the economy ahead of the Nov. 3 presidential election.

India, second only to the United States in coronavirus infections, is also lifting most restrictions even as the pandemic rages.

The IMF said lockdowns needed to be sufficiently strict to curb infections, suggesting that “stringent and short-lived lockdowns could be preferable to mild and prolonged measures,” they wrote.

The crisis was hitting more vulnerable groups harder, they noted, with stay-at-home orders and school closures

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