PFC Designated as Lending Institution for CalCAP Program

February 02, 2013

PACE Finance Corporation (PFC) was recently designated as one of the newest lending institutions in the California Capital Access Program (CalCAP). CalCAP has new lending opportunities for financial institutions in California like PFC. With more than $90 million available for loan guarantees for small businesses, CalCAP enables PFC to offer more loans than ever before. CalCAP also has increased the maximum loan amount and size of eligible businesses. The program recently received $6 million from the state and expects to receive $84 million in federal funding from the Small Business Lending Act of 2010. Combined, these funds may leverage more than $2 billion in loans to California small businesses. CalCAP is administered by the California Pollution Control Financing Authority (CPCFA) in the State Treasurer’s Office.
CalCAP encourages financial institutions to make loans to small businesses that fall just outside of conventional underwriting standards. A form of loan portfolio insurance, CalCAP may provide up to 100 percent coverage to lenders on certain loan defaults. With each new loan, the borrower, lender and CalCAP each contribute to a loan-loss reserve fund. The fund grows over time and provides the incentive for the lender to make loans that are outside their normal lending guidelines.
Small Business Eligibility Requirements for the CalCAP program include:

  • The borrower's business must be in one of the industries listed in the qualified Standard Industry Classification (SIC) or the North American Industry Classification System (NAICS) codes list.
  • The borrower's primary business and at least 51% of its employees or business income, sales or payroll must be in California.
  • The business activity resulting from the bank's loan must be created and retained in California.
  • The small business must be classified as a small business under U.S. Small Business Administration guidelines (Title 13 of the Code of Federal Regulations) and  have fewer than 500 employees.

For more information about CalCAP click here.