The California Capital Access Program (CalCAP) encourages banks and other financial institutions to make loans to small businesses. CalCAP is administered by the California Pollution Control Financing Authority. CalCAP is a loan loss reserve program which may provide up to 100% coverage on certain loan defaults. By participating in CalCAP, lenders have available to them a proven credit enhancement to meet the financing needs of California's small businesses.
CalCAP supports loans made to small businesses to assist them in growing or maintaining their businesses. Loans in the Heavy-Duty Vehicle Air Quality Loan Program can be used to finance diesel exhaust retrofits and heavy-duty trucks and buses (over 14,000 gross vehicle weight rating (GVWR)) equipped with engines certified to specified engine emission standards for 2007 and newer model year engines The engines can use diesel fuel, compressed natural gas (CNG), liquefied natural gas (LNG) or other fuels.
The maximum loan amount is $5 million (maximum of $2.5 million enrolled over a 3 year period), and can be enrolled for up to ten years. The maximum interest rate a lender may charge on any single loan is 20% annual percentage rate (APR). Lenders set the terms and conditions of the loans and decide which loans to enroll into the CalCAP/ARB Program. CalCAP, in conjunction with ARB, the Independent Contributor, contributes up to 14% of the principal balance enrolled to a loss reserve account.
Loans or Terminal Rental Adjustment Clause (TRAC) leases can be short or long-term, have fixed or variable rates, be secured or unsecured, and bear any type of amortization schedule.