SSBCI — California (CalCAP Collateral Support & Loan Guarantee)

About this programme

CalCAP Collateral Support (CalCAP CS) is a California state credit-enhancement programme run by the California Pollution Control Financing Authority (CPCFA), a division of the California State Treasurer's Office, in coordination with IBank. It exists to solve one specific underwriting problem: a small business that a bank considers creditworthy on cash flow and character, but whose loan the bank cannot approve because the business does not have enough hard collateral to pledge against it.

The programme works by pledging cash — not a guarantee promise, an actual cash deposit — into an account tied to a specific enrolled loan, to cover some or all of that collateral shortfall. The lender still makes its own credit decision and sets its own loan terms; CalCAP CS only closes the collateral gap that would otherwise cause the loan to be declined or scaled back.

CalCAP CS is one of several CalCAP programmes CPCFA administers (alongside CalCAP for Small Business, a loan-loss reserve programme). Since 2026, CalCAP CS is funded in part through California's allocation of the U.S. Treasury's State Small Business Credit Initiative (SSBCI 2.0), which lets CPCFA support a larger volume of loans than the state's own capital alone would allow.

The programme is delivered entirely through participating financial institutions. A small business does not apply to CPCFA directly — it applies for a loan with a bank, credit union, or CDFI that participates in CalCAP CS, and that lender enrolls the approved loan in the programme.

How it works

A participating financial institution (PFI) — any federal or state-chartered bank, savings association, federally certified Community Development Financial Institution (CDFI), or credit union in good standing with its regulator — underwrites a loan or line of credit to a small business in the ordinary course, then identifies that the loan is collateral-short despite being otherwise creditworthy.

Once CPCFA approves the loan for CalCAP CS enrollment, it establishes a cash pledge held in an account unique to that loan. Coverage is up to 40% of the loan amount, with an additional 10% available for businesses located in a severely affected community — so up to 50% of the loan can be covered in those cases. That cash pledge is what the lender can draw against if the loan defaults and collateral proves insufficient.

Enrolled loans and lines of credit range from $25,000 to $20,000,000, with a maximum cash pledge of $10,000,000 per enrollment. Loans can be term loans or revolving lines of credit, short- or long-term, fixed- or variable-rate, on whatever amortization schedule the lender sets — CalCAP CS does not dictate loan structure, only the collateral-support layer.

CalCAP CS charges a CalCAP Fee on the collateral support amount: 0.75% due on the date of the collateral support agreement, and a further 1.00% due on the agreement's first anniversary. These fees fund the programme's cash-pledge reserves; they are separate from whatever interest, origination, or servicing fees the lender itself charges on the underlying loan.

Within 15 business days of the loan closing, the PFI submits the Collateral Support Initial Approval documentation with final loan terms and closing fees. If the loan later defaults, the lender submits a CalCAP CS Claim Application to draw against the loan's cash pledge account.

Who can apply

Eligibility runs through the lender relationship, not a direct CPCFA application. A business first needs a bank, credit union, or CDFI willing to underwrite the loan and enroll it in CalCAP CS.

The borrowing business must operate in an industry classified under an eligible North American Industry Classification System (NAICS) code and must not be a prohibited activity under CalCAP statutes and regulations — prohibited activities include adult entertainment, firearms sale and use, tobacco sale and use, bars and liquor stores, cannabis sale, and gambling.

An eligible small business must have 750 employees or fewer.

Ineligible uses of CalCAP CS-backed financing include non-business purposes, passive real estate investment, residential real estate, reimbursing funds owed to an owner, repaying delinquent taxes or taxes held in trust or escrow, and any portion of an SBA loan or other government-guaranteed loan.

How to apply

1. Apply for the underlying loan or line of credit directly with a bank, credit union, or CDFI that participates in CalCAP CS — the small business does not submit anything to CPCFA itself at this stage.
2. The lender underwrites the loan through its normal process. If the loan is otherwise approvable but short on collateral, the lender determines whether enrolling it in CalCAP CS closes that gap.
3. The lender submits the loan for CalCAP CS enrollment, including a Participating Financial Institution Lender Certification and a Borrower Certification for the loan enrollment.
4. Once CPCFA approves enrollment, the lender closes the loan and, within 15 business days, submits the Collateral Support Initial Approval documentation with the final loan information and closing fees to establish the loan's cash-pledge account.
5. If the loan later goes into default, the lender — not the borrower — files a CalCAP CS Claim Application to draw against the pledged collateral-support funds.

Documents you’ll typically need

• Participating Financial Institution Lender Certification
• Borrower Certification Form for Loan Enrollment
• Collateral Support Initial Approval documentation (submitted by the lender post-closing)
• CalCAP CS Claim Application (submitted by the lender only if the loan defaults)

Frequently asked

Reviewed 2026-08-16. Programmes change — confirm current eligibility, amounts and deadlines on the official page before you apply. CapEasy is a private consultancy and is not affiliated with any government authority.