Capital Access Program (CAP)
A simple and flexible credit enhancement for small businesses utilized statewide by New Hampshire banks.
Whether your client is a start-up, non-profit, or established business, the CAP program can help you provide financing to small businesses across the state. Our CAP program provides a 100% guarantee on term loans and lines of credit up to $200,000.
- The business must have annual revenues of less than $5 million
- Total CAP loan enrollment may not exceed $200,000
- New businesses must contribute 20% cash equity
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Are non-profits eligible?
Yes, non-profits are fully eligible assuming they meet all other requirements.
Are start-ups eligible?
Yes, but the borrower is required to put a minimum of 20% of the total project cost into the transaction as cash equity. The equity contribution cannot be borrowed funds from another source.
Are there any application fees?
The BFA charges no application fee for any program.
Are there any prohibited industries with regards to the BFA's lending activities?
The BFA prohibits lending to any industries involved in illegal activity on the federal or state level. Also prohibited are industries that trade in commodity goods, financial instruments, pyramid sales, or whose primary business is comprised of lending activities.
Can a loan be partially enrolled in the CAP program?
Yes, you can partially enroll loans. For example, $50,000 of CAP coverage on a $100,000 loan would result in 50% of the loan being covered under the CAP program. Lenders can use partial enrollment to make larger loans via the CAP program. For example, $200,000 of CAP coverage on a $300,000 loan would result in a 66% CAP coverage for that loan.
Can CAP be used to refinance existing debt?
Lenders cannot use CAP to refinance debt already in place with that same lender, unless the debt was already enrolled in the CAP program. However, refinancing debt held by another lender is permitted.
Do lines of credit enrolled in CAP have any out-of-debt requirements?
Lines of credit enrolled in the CAP program must be brought to a zero balance for 30 days once per year.
How do I apply to enroll a loan in the CAP program?
You can submit an enrollment form online, via email, or hard copy. We encourage our lending partners to reach out to the BFA with any questions prior to loan enrollment.
Is passive or investment real estate eligible?
No, real estate must be owner occupied to be eligible. However, if the business occupies only part of the real estate and rents the remainder, it may be eligible. Call the BFA for further discussion in these circumstances.
Is residential real estate eligible?
No, residential real estate is not eligible.
Is there a maximum CAP enrollment amount?
The maximum CAP enrollment amount is $200,000 per borrower.
What are the fees in the CAP program?
The lender chooses between 3% and 4% of the loan balance to be contributed to the CAP fund at closing, chargeable to the borrower. The BFA matches that amount 2.5 times and deposits the resultant amount in the loan loss reserve funds with the lending institution. There are no ongoing annual fees.
What are the reporting requirements for a lender participating in the CAP program?
The lending institution reports a quarterly report showing the current balance of all CAP-enrolled loans. The report must include any delinquency information.
What happens if a lender needs to make a claim for reimbursement under the CAP program?
After the lender has exhausted all reasonable collection efforts and charged off the remaining loan balance, they fill out a claim form along with a loan history report and are reimbursed for the loss after BFA approval.
What is the approval process for CAP loan enrollments?
The lender submits the CAP enrollment form and a copy of the credit write-up for loans over $50,000. BFA approval is typically 24 hours assuming the submitted loan is eligible for the program.