0974 Pollution Control Financing Authority
Program Descriptions


The objective of this program is to encourage banks and other financial institutions to make loans to small businesses. 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 federal and 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. Additional incentives are provided to lend to businesses located in specified economically depressed areas including Enterprise Zones. 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. As of June 30, 2014, approximately $1.5 million of the $6 million has been used to assist small businesses.

In addition, California was awarded an allocation of federal funds in the amount of $168.6 million from the federal State Small Business Credit Initiative (SSBCI). CPCFA and the Governor's Office of Business and Economic Development (Go-BIZ) equally share this allocation and have available $84.3 million each. These funds have enabled CPCFA to significantly expand the availability of its CalCAP program statewide. In addition, in the first quarter of 2013 CPCFA launched the Collateral Support Program to assist more small businesses and utilize the SSBCI Federal funds. The funds are allocated to California in three installments based on program progress, with CPCFA receiving approximately $27 million in March 2011, and another $27 million in December 2013. A memorandum of understanding between CPCFA and Go-BIZ transferred an additional $10 million from Go-BIZ to CPCFA in the third quarter of 2014 to support CPCFA's high-demand programs. It is anticipated that the final installment of federal funds will be requested in the fourth quarter of 2014.

Utilizing the CalCAP model, CPCFA has partnered with the Air Resources Board (ARB) to assist diesel truck and equipment owners in meeting new clean air requirements, and with the Department of Resources, Recycling, and Recovery to assist recycling related businesses.