0974 Pollution Control Financing Authority
Program Descriptions

20 - CALIFORNIA CAPITAL ACCESS PROGRAM FOR SMALL BUSINESSES

The objective of this program is to encourage banks and other financial institutions to make loans to small businesses that fall just outside of conventional underwriting standards. CalCAP for Small Businesses is a form of loan portfolio insurance that may provide up to 100% coverage on certain loan defaults. By participating in CalCAP, lenders have available to them a proven financing mechanism to meet the financing needs of California's small businesses. The strength of CalCAP rests in its simplicity and its leverage of state funds. The program works through the creation of a loan loss-reserve fund for each participating financial institution. The CPCFA funds this reserve together with the financial institution and the borrower. The reserve serves to reduce loan-loss risk, allowing banks to lend to targeted California small businesses. Chapter 731, Statutes of 2010, appropriated $6 million General Fund to CalCAP to increase lending efforts, especially in high unemployment areas. It is expected that the new funds will lead to a rapid and significant expansion of the CalCAP program. Additional incentives are provided to lend to businesses located in state-designated Enterprise Zones. CalCAP has partnered with the Air Resources Board to assist diesel truck and equipment owners in meeting new clean air requirements. CalCAP has partnered with the Department of Resources, Recycling and Recovery to assist recycling related businesses.