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 percent 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. 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, 2015, approximately $2.6 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, $27 million in December 2013, and $29 million in August 2015.

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 by directing a total of $70 million in Air Quality Improvement Program funds towards the purchase or retrofit of diesel trucks to comply with ARB's Statewide Truck and Bus Rule. CPCFA has also partnered with the California Energy Commission to implement a $2 million pilot program to provide credit enhancements and rebates to small businesses borrowers who install electric vehicle charging stations. Similarly, CPCFA is partnering with the Department of Resources, Recycling, and Recovery to assist with the financing of important state recycling objectives.