ALBUQUERQUE — Cervantes Food Products Inc. will move its chile sauce and salsa business next year from a 2,000-square-foot manufacturing space in Albuquerque to a custom-built, 6,000-plus square foot facility in Los Lunas.
A $280,000 loan from local microlending organization Accion allowed Cervantes’ owners, Arian and Richard Gonzales, to buy property this year in Los Lunas. The couple is now working with Accion and Nusenda Credit Union to obtain $750,000 to build the facility, which they hope to open early next year.
The latest Accion loan marks the third time the Cervantes owners have turned to the microlender to help expand their business. They received two smaller loans of $12,000 in 2011 and $50,000 in 2013, both of which are repaid.
But the business couple was surprised to learn that the Accion loans were actually financed with state capital from the Severance Tax Permanent Fund managed by the Small Business Investment Corp., which provides lines of credit to Accion and two other local microlenders to support small businesses throughout New Mexico.
“I’m thrilled to hear it,” Arian Gonzales told the Journal. “They’re investing in our communities. That credit is fundamentally important for small businesses like ours.”
Thousands of other new and existing small businesses around the state have received loans since 2001 to launch or grow their operations from Accion, the New Mexico Community Development Loan Fund, WESST Corp. and others. But like the Cervantes owners, few are aware that the money they received came from state funds managed by the SBIC.
SBIC funding has leveraged about $82 million in small-business loans through a $23.4 million line of credit to the local lending institutions, which continuously recycle repaid loans back into new credit for more businesses, allowing them to lend out more than three times the original capital provided by SBIC.
All the microlenders have independently raised capital from other institutions and charitable foundations. But the SBIC accounts for the lion’s share of microloans to businesses in New Mexico.
Accion has amassed $46 million in capital from many institutions and foundations to lend to small businesses in five states. But in New Mexico, it draws principally on a $7.5 million SBIC line of credit to assist local businesses.
About 88 percent of locally-loaned money came from the SBIC last year, said Accion President and CEO Anne Haines.