Lender Capital Access Program (CAP) is a flexible loan loss reserve program that provides lenders with a way to fund projects considered too risky for conventional lending through creating a lender specific loan loss reserve. CAP can provide access to financing for companies, especially start-ups and small businesses which may not be able to obtain conventional financing. This is accomplished through the creation of a lender-specific loan loss reserve.
CAP is structured as a public-private loan loss reserve program. Each lender participating in CAP has its own reserve to protect against losses on loans approved by the lender and enrolled in the program. The lender, along with the borrower, set aside funds as a reserve. This combined total of reserve funds is matched by MEDC. If a borrower defaults, this reserve can be used to reduce the lender’s loss. If the funds are not needed, they become part of an ongoing reserve for future loans made by the lender and enrolled in CAP.
ELIGIBLE PROJECTS & FINANCING
HOW THE PROGRAM WORKS
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