9/11/2017

CAP Sustainability

May 17, 2017

Plans for New York State
2

NYS CAP Overview

History

• NYS historically had a CAP that was last active in the 1990’s

• NYS originally allocated $18.9 MM to CAP at the inception of SSBCI

• Shifted $10 MM to its VC program, INNY, in 2013

• To date, NYS has obligated $3.2 MM

Per NYS Statute

• Limit of $500,000 per loan

• Does not require a 50/50 split between borrower and lender on LLR deposit – most 

borrowers deposit as little as $10

• Current lender agreements allow participating lenders to keep all LLR funds once 

program ends and outstanding total loan principal is zero
3

NYS CAP Impact 

Since April of 2012:

• 19 active participating lenders 

• Nearly 1900 businesses have secured more than $60.2 MM

• Average loan is $31,800 

• Mean loan is $10,000

• Claim rate of 1.6%
4

Going Forward

• NYS sees CAP as providing critical support to its CDFI sector

• Considering amending lender agreements to require return of 75% of LLR funds to allow us to fund 

the CAP 

• Federal budget (and status of CDFI Fund FA and TA grants) will inform how we move forward with 

those agreements 
5

Going Forward

New opportunities to leverage CAP –

Partnering with Community Foundations interested in Impact Investment

• IRS Notice 2015-62 provided recent guidance allowing private foundations to consider mission 

related investing

• NYS and each participating community foundation makes low-interest loan capital available to 

CDFIs, with CAP providing additional security to the community foundation that the investment is 

sound

• Win-Win-Win

o Community foundations realize their missions of investing locally, while at the same time, 

investing in sound and responsible lenders; they do not have to worry about accounting, deal 

sourcing, tracking

o CDFIs access low-interest loan capital

o NYS sees increase in small business lending in low and moderate income communities, while 

also helping to foster new and innovative partnerships
California Pollution Control Financing Authority

California Capital Access Loan Program:

Building a Sustainable Program

State Small Business Credit Initiative Webinar

May 17, 2017

Reneé Webster-Hawkins

Executive Director 
History of CPCFA & CalCAP

 California Pollution Control Financing Authority (CPCFA) is a financing 

authority which stimulates environmental cleanup, economic 

development and job growth throughout the State via bonds, credit 

enhancements and grants.

 Founded in 1973, CPCFA originated as a conduit issuer of tax-exempt 

bond financing for private pollution control facilities serving a public 

benefit. 

 Fees assessed on bond issuances to large businesses established the 

Small Business Assistance Fund (SBAF) enabling CPCFA to create 

additional innovative financing programs, including:

• The California Capital Access Program (CalCAP), established in 1994 to 

establish loan loss reserve accounts for participating lenders; and

• Grants and loans for assessment and remediation of brownfield and infill 

development sites.

California Pollution Control Financing Authority
California Pollution Control Financing Authority

CPCFA’s CalCAP Programs (1 of 2)

 CalCAP for Small Business: Perfect for working capital, start-up costs, tenant 

improvements and other typical credit needs.

• State Program: 

• Began in 1994 with CPCFA’s SBAF money: $45 million

• 2010 State General Fund: $6 million 

• Federal SSBCI Program (2010-2017): $19 million 

 CalCAP Air Resources Board (ARB) On-Road Heavy-Duty Vehicle Air Quality Loan

Program: For owners of small fleets to finance the purchase or retrofit of heavyduty diesel trucks driven primarily in California to comply with the State's engine

emission standards.

• Air Quality Improvement Plan money (2009-now): $104 million

 Collateral Support Program: Provides a different kind of credit enhancement for

borrowers with strong business plans who lack sufficient collateral.

• Federal SSBCI Program (2010-2018):
California Pollution Control Financing Authority

CPCFA’s CalCAP Programs (2 of 2)

 CalCAP Electric Vehicle Charging Station Financing Program: For businesses 

wanting to install EV chargers for their employees or customers. Borrowers may

be eligible for a rebate after 48 months.

• California Energy Commission (2015-now): $2 million

 CalCAP Americans with Disabilities Act Financing Program: For mom-and-pop

businesses to make accessibility retrofits.

• State General Fund (2016-now): $10 million

 CalCAP Seismic Safety Loan Program: For small businesses and building owners to

upgrade the seismic safety of their residential and commercial real estate. 

• State General Fund (2017-now): $10 million

*Note: All program funding amounts except for SBAF money include administrative 

expenses.
California Pollution Control Financing Authority

CalCAP Objectives

Program 

Growth

Public 

Stewardship 

 Program

 Volume 

 

Revenues 

Sound lending 

and 

administration

Sustainability

Stimulate small 

business sector

More borrowers 

and lenders
Participating Financial Institutions:

CalCAP Small Business and CalCAP ARB

California Pollution Control Financing Authority

ARB Heavy Duty Program

State-Chartered Banks 9

Non-Profit CDFIs 1

Federally-Chartered Banks 3

Finance Lenders 26

Credit Unions 2

Microbusiness Lenders 1

Total 42

Small Business Program

State-Chartered Banks 23

Non-Profit CDFIs 9

Federally-Chartered Banks 3

Community Development Corporations 2 

Credit Unions 1

CDFIs 1

Total 39
California Pollution Control Financing Authority

CalCAP Performance Data by Year: 

CalCAP/State

Total 

Loans

Total Loan 

Amount*

Total 

Contributions

**

Claims 

Enrolled

Total

Dollar of 

Claims

LLR 

Balance Ratio

2004 557 $ 50 $ 4.4 84 $ 1.7 $ 19.4 11%

2005 644 $ 50 $ 5.3 35 $ 0.75 $ 24 14%

2006 750 $ 67.7 $ 5.5 42 $ 1.5 $ 28 14%

2007 704 $ 76 $ 8.6 58 $ 2.4 $ 34.2 15%

2008 519 $ 61.4 $ 4.8 89 $ 7 $ 32 13.2%

2009 523 $ 45.8 $ 3.2 170 $ 7.8 $ 27.4 10.5%

*All amounts in millions

**Includes CPCFA SBAF, and borrower and lender fees
California Pollution Control Financing Authority

CalCAP Performance Data by Year: 

CalCAP/SSBCI

Total Loans Total Loan 

Amount

Total CPCFA 

Contributions*

Total Borrower & 

Lender Fees

Claims 

Enrolled

Default 

%

Total Dollar

of Claims

2011 1,007 $ 51,979,592 $ 2,097,171 $ 2,403,815 84 8.8 $ 2,298,401

2012 1,229 $ 40,349,113 $ 2,090,090 $ 1,854,441 34 2.8 $ 750,513

2013 1,503 $ 44,544,560 $ 2,364,579 $ 1,886,793 57 3.8 $ 1,273,166

2014 1,365 $ 51,578,176 $ 2,750,531 $ 2,546,761 68 5.0 $ 1,551,075

2015 1,841 $ 85,571,383 $ 4,157,733 $ 3,529,223 43 2.3 $ 399,924

2016 1,934 $ 96,811,646 $ 4,564,432 $ 4,901,109 112 5.5 $ 1,431,545

*Includes federal SSBCI, CPCFA General Fund and CPCFA SBAF
California Pollution Control Financing Authority

CalCAP Program Performance Aggregate Data:

CalCAP/Small Business

Total Loans (2011-2016) 8879

Total Loan Amount $ 370,834,470

Average Loan Amount $ 48,913

Average Loan Amount (Excluding Opportunity 

Fund’s enrolled loans) $ 102,984

Loans Over $1 million 63
California Pollution Control Financing Authority

CalCAP Fiscal Data

Program Program

Allocation1

Administrative

Costs

Net 

Allocation

Expenditures 

To Date2

Remaining

Funds

Est. End 

Date3

CalCAP/SB

Federal $19,896,095 $2,467,751 $17,428,344 $16,663,267 $765,0775 June 2017

CalCAP/SB 

State4 $6,000,000 $300,000 $5,700,000 $3,428,114 $2,271,886 August 2017

Collateral 

Support 

Program

$65,140,207 $616,937 $64,523,270 $57,132,396 $7,390,874 December 

2017

CalCAP/ARB $104,300,000 $7,301,000 $96,999,000 $86,388,721 $10,610,279 October

2017

1The allocations are adjusted from the original award from the U.S. Treasury to reflect an additional $321,716.50 allocated to CalCAP/SB from a 

fourth tranche awarded in December 2016, and an additional $440,207.00 reallocated from the Small Business Loan Guarantee Program to the 

Collateral Support Program in February 2017.

2As of March 10, 2017.

3Estimated based on historic program activity data.

4The $6 million allocation appropriated in 2010 from the State General Fund supports additional matching contributions for borrowers located in 

severely affected communities, for the occasional loan that does not meet the eligibility criteria under the federal SSBCI program rules and when the 

federal monies are exhausted.

5Pending applications submitted to CPCFA will exhaust these monies upon final approval.
Recapture: Growing Sustainable CalCAP Programs (1 of 3)

Actual/Planned Event

May 2015 Lender Webinar: Discussion of ARB’s direction to explore 

increased program sustainability through changes to 

contribution rates and recapture of funds.

June 2015 CPCFA Board approved ARB I/A. 

“To increase the longevity of the Program funds, CPCFA may by regulation 

establish procedures to recapture funds from a lender’s loss reserve account on 

a periodic basis when enrolled loans mature, to be returned to the Program 

Account to support future contributions for eligible loans and administrative 

costs.”

Summer 2015 Discussion with individual lenders regarding contribution 

rates and recapture.

October 2015 Governor signed AB 1230 implementing CalCAP ADA 

program, including recapture requirement. 

“The authority shall adopt regulations pursuant to subdivision (c) of Section 

44520 to implement the program, including provisions specific to this program 

as described in this section and further including provisions to: ... (6) Recapture 

from the loss reserve account the authority’s contribution for each enrolled loan 

upon the maturation of such loan or after five years from the date of 

enrollment, whichever happens first, to be deposited in the fund and applied to 

future program and administrative expenditures.”
April 2016 Lender Webinar described recapture for CalCAP/ADA.

June 2016 ADA Stakeholder Webinar

CPCFA Board approved ARB I/A requiring recapture. 

“To increase the longevity of the Program funds, CPCFA shall pursue a 

regulation to establish procedures to recapture contribution funds from a 

lender’s loss reserve account on an annual basis upon maturity of enrolled 

loans. These funds shall be returned to the Program Account to support future 

contributions for eligible loans and administrative costs. Recapture is not 

applicable for contributions on defaulted or charged off loans for which a claim 

has been approved, unless the amount recovered through the liquidation of the 

collateral exceeds the approved claim.”

Presentation of proposed CalCAP/ADA program to CPCFA 

Board.

June 27, 2016 SB 837 Budget Bill signed, including CalCAP Seismic Safety 

program. 

“The authority shall adopt regulations pursuant to Section 44520 to implement

the program, including, but not limited to, provisions to: ... (6) Recapture from 

the loss reserve account the authority’s contribution for each enrolled loan upon 

the maturation of that loan or after 10 years form the date of enrollment, 

whichever happens first, to be deposited in the fund and applied to future 

program and administrative expenditures.”

Recapture: Growing Sustainable CalCAP Programs (2 of 3)
July 2016 Draft regulations for CalCAP/ADA program posted.

Public outreach for CalCAP/ADA statewide and via 

webinar, to describe program and solicit feedback on 

draft regulations.

August 2016 Proposed regulations to implement CalCAP/ADA to be 

presented to CPCFA Board, for submittal to OAL.

November 2016 Lender webinar discussing proposed regulations to 

implement recapture for CalCAP/Seismic Safety.

December 2016 Proposed regulations to implement recapture for 

CalCAP/Seismic Safety presented to CPCFA Board and 

approved by OAL.

April 2017 CalCAP Stakeholder Symposium to receive proposals 

and information regarding the sustainability of the 

CalCAP programs, including recapture.

Summer 2017 Proposed regulations to implement recapture in both 

the CalCAP/Small Business and CalCAP/ARB programs.

Recapture: Growing Sustainable CalCAP Programs (3 of 3)
California Pollution Control Financing Authority

Five Proposed Program Changes

1. A framework to implement the recapture of funds from

existing loss reserve accounts to support ongoing program

contributions and administrative costs.

2. An option for a lender to elect to pool fees and

contributions from all CalCAP programs into a single loss

reserve account, unless a funding source expressly

prohibits it.

(Continued on next slide)

- Identified by current and potential lenders, funders and legislators
California Pollution Control Financing Authority

Five Proposed Program Changes - Continued

3. Increasing the initial state contribution for new

lenders, to accelerate the initial build-up of a loss

reserve account and incentivize new lender

participation into the CalCAP programs.

4. The establishment of a reservation system, to

facilitate a lender’s assurance of the availability of

program funding.

5. How to build in incentives for lenders to maintain

default rates at or below the national average

for small business lending.
Stakeholder 20% Recapture Scenario*

California Pollution Control Financing Authority

20% X Outstanding Principal Balance 

of Enrolled Loans

• Minimum threshold = 20% of outstanding principal 

balance of enrolled loans

• Amount available for recapture = total public 

contributions for loans matured or older than 5 years

• Contributions made for defaulted loans not included

*intention of Senate Bill 551, pending in the California State Legislature
Contribution Ratio Calculation

 Loan Loss Reserve Total Fees & 

 Balance Contributions

 Outstanding Principal Total Enrolled Balance Loan Amount

• Outstanding balance = outstanding principal for active 

loans that are less than 60 months of age

≥

California Pollution Control Financing Authority
Program Data and Recapture Analysis: 

CalCAP/Small Business

Lender A Lender B Lender C Lender D

Current LLR Balance $276,505 $1,751,413 $13,595,110 $11,561,766

Loan

Data

# of loans enrolled 228 1648 413 7067

Loan Amount Enrolled $5,254,716 $34,938,315 $181,336,376 $92,641,527

Outstanding Balance $2,761,607 $18,852,131 $47,877,973 $26,885,053

Claim

Data

# of claims 9 74 14 411

Total Claim Amount $136,127 $1,153,315 $1,040,243 $2,430,857

Default Rate 3.95% 4.49% 3.39% 5.82%

Recapture

Data

Contributions Available 

for Recapture $14,450 $851,760 $4,334,355 $2,758,183

Fixed

Percentage 20% 20% 20% 20%

Recapture 

Threshold $552,321 $3,770,426 $9,575,595 $5,377,011

Actual 

Recapture $0 $0 $4,019,516 $2,758,183

Remaining LLR 

Balance $276,505 $1,751,413 $9,575,594 $8,803,583

Ratio

Percentage 8% 9% 8% 14%

Recapture 

Threshold $216,122 $1,654,328 $3,898,786 $3,838,913

Actual 

Recapture $14,450 $97,085 $4,334,355 $2,758,183

Remaining LLR 

Balance $262,056 $1,654,328 $9,260,756 $8,803,583
To be continued....

Stay tuned to California legislation and rulemaking at:

 www.treasurer.ca.gov/cpcfa/

 http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_i

d=201720180SB551

Contact CPCFA at:

CalCAP@treasurer.ca.gov

916.654.5610

California Pollution Control Financing Authority