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Questions
What is CalCAP?
The
California Capital Access Program (CalCAP) encourages banks and other
financial institutions to make loans to small businesses. CalCAP is a form of
loan portfolio insurance that provides up to 100 percent repayment on certain
kinds of loan defaults. It is offered under the direction of the State
Treasurer’s Office through the California Pollution Control Financing Authority
(CPCFA).
Costs to Participate
CalCAP includes a loan loss reserve account funded by contributions from the
lender, the borrower, and CPCFA each time a loan is approved. The borrower and
lender each pay a premium of 2 to 3½ percent of the loan amount and CPCFA pays a
matching combined premium of 4 to 7 percent. Each participating lender has it
own CalCAP loan loss reserve account to cover losses from their CalCAP loans. If
one of the loans covered under the program goes into default, the lender can
file a claim to offset its losses on the loan to the extent of coverage (or
balance) in its own account. This lowers the risk for lending to small and/or
new businesses.
The California Integrated Waste Management Board participates in CalCAP as an
independent contributor to the loan loss reserve accounts held for CalCAP
lenders. The Board has provided $500,000 in funds to CPCFA to be used to pay a
borrower’s premium into a loan loss reserve account. The borrower must have an
eligible project, defined below, in order to apply for Board funds to pay his or
her CalCAP loan loss reserve premium. The borrower submits an eligibility
certification form with the standard CalCAP Loan Enrollment Form to CPCFA.
Eligible Applicants and Projects*
- Source Reduction: Applicant is a business that practices, or
proposes to practice, appropriate source reduction by performing specific
actions that cause a material net reduction in the generation of solid waste
in the production of a product.
- Reuse: Applicant is a business that reuses a product (not a
material) which has served its useful life, and provides new value to the
product, by reconditioning, reprocessing, or some other value-added process
which makes the product usable again for its original intended purpose. In
all cases, the project must demonstrate that it will have a reduction impact
in the amount of material being disposed of in California’s landfills.
- Recycling: Applicant is a business that recycles by using
postconsumer or secondary materials to produce a value-added finished
product or provides necessary intermediate processing of a recycled or
recovered material. A value-added product is one in which a material has
changed its character or composition through a manufacturing process. This
differs from collection, sorting, and baling of recycled/recovered material
for convenience or ease of transportation.
*The materials and or products that are source-reduced, reused, or recycled
exclude metals, electronic waste, and hazardous waste. Eligible materials
include construction and demolition waste, green material, plastic, rubber,
glass, and paper.
For More Information and How to Apply for Funding
Contact the
CalCAP program manager at the California Pollution Control Financing Authority.
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