The Georgia Capital Access Program (GCAP) is a new small business lending program. The Program assists small businesses with obtaining loans through participating financial institutions (lenders). GCAP lenders may be banks, credit unions, or CDFIs, as defined in the SSBCI act. The lenders are encouraged to make loans to small businesses whose requests meet “traditional” underwriting standards but whose assets are impacted by the ongoing economic restructuring (real-estate values, perception of receivables strength, etc.).
GCAP provides portfolio insurance to the lenders by requiring insurance premiums to be paid, by the borrower and the lender, to a loan loss reserve fund for each loan enrolled. The borrower and lender each make an equal contribution of 2% to 7% of the amount enrolled, which GCAP will match, to a lender’s loan loss reserve account. A borrower may also pay the lender's fee, and vice versa, as long as a written agreement is signed. GCAP allows the borrower's fee to be financed and may be part of the loan proceeds. Each financial institution has a separate loan loss reserve fund managed by GCAP.
As required by Treasury, Georgia will require each lender qualifying to participate in GCAP to propose a plan for reaching underserved communities. A CRA plan generally will suffice for this requirement. As part of the program outreach, staff will target community banks, credit unions, and CDFIs which have a history of serving underserved communities. In addition to focusing on those community lenders in underserved and high unemployment areas, the lending area of all of the financial institutions encouraged to enroll will cover 100% of Georgia, which will encompass all markets and communities in the State.
All lenders seeking approval as participating lenders in GCAP must undergo a vetting process, whereby the State will evaluate the lender on management and lending experience as well as financial capacity and ability. The first step to becoming an approved lender in the GCAP program is to complete a lender application package and submit it to DCA for review. Following review and notification from DCA of approval, the lender and the State will then execute a GCAP Program Participation Agreement.
Please see the Downloads section below for a complete digital copy of the lender application package for the GCAP program as well as a draft of the GCAP Program Participation Agreement (PPA). For your information, the draft PPA also includes copies of GCAP transaction documents as exhibits. Please note that the draft PPA is for review purposes only. The PPA should not be completed and signed by the lender until after DCA has reviewed the lender’s application package and formally approved the lender for participation in the Georgia SSBCI. At that time, the appropriate PPA document will be submitted to the lender for execution.
GCAP Application Package, which includes: 1) Cover Letter; 2) Exhibit A, GCAP Reserve Set-up Instructions; 3) Exhibit B, Regulatory Order Certification; 4) Exhibit C, Georgia SSBCI Training Request Form.
GCAP Draft PPA, which includes GCAP transaction documents.