Small Businesses In Colorado Get $17M Boost
DENVER – Small businesses in Colorado are getting a $17 million boost through two new capital access programs announced by Gov. John Hickenlooper, the Colorado Office of Economic Development and International Trade (OEDIT), and Colorado Housing and Finance Authority (CHFA).
The programs, Colorado Capital Access and Cash Collateral Support, will help businesses with 750 or fewer employees obtain loans from their local bank for working capital, inventory, real estate or equipment purchases, or lines of credit.
“Colorado has more than 570,000 entrepreneurs and small businesses that fuel our state’s economic recovery,” Gov. John Hickenlooper said. “As we traveled around the state during the bottom-up economic development process, we heard from communities from Cortez to Julesburg about the importance of access to capital. These programs will increase the availability of capital that small businesses need to hire more employees, grow their product lines and expand their businesses.”
Funding for Colorado Capital Access and Cash Collateral Support was authorized by Congress through the Small Business Jobs Act of 2010. In October 2011, Colorado received $17.2 million through the Act’s Small Business Credit Initiative Program, which was designed to assist states in implementing capital access programs. Two million will be used to for the Colorado Capital Access program, and $15.2 million for Cash Collateral Support program. All proceeds must be deployed by October 2013.
CHFA will serve as the program administrator for both programs based on their successful track record in overseeing the Colorado Credit Reserve program.
CHFA’s Executive Director and CEO, Cris White said, “CHFA’s strong partnership with banks will help ensure these resources are deployed to small businesses across the state. The Colorado Credit Reserve program has clearly demonstrated that increasing access to capital helps create and retain jobs, which is critical to strengthening the state’s economy. These new programs will further that effort.”
Colorado Capital Access is modeled after the successful Colorado Credit Reserve program (CCR), which has helped over 500 businesses obtain $20.5 million in financing and create or retain more than 3,800 jobs. CCR has successfully leveraged $15 in private sector lending for every $1 of program funds utilized. The average loan amount under the CCR program is $40,000, and nearly half of the businesses served have been women or minority-owned.
Lenders participating in the Colorado Capital Access program will set up a pooled loan loss reserve fund to help offset any losses that occur with loans registered in the program. Colorado Capital Access will match the lender’s contribution into their loan loss reserve fund, $1 for $1, up to a maximum of 7 percent of the loan amount, for each loan registered in the program. The maximum loan size is $750,000.
Cash Collateral Support is a credit enhancement program designed to help businesses get access to loans they might not otherwise qualify for due to collateral shortfalls. Lenders may apply for up to $500,000 in cash collateral support to strengthen a borrower’s collateral position. The maximum loan size supported is $5 million.
Businesses may obtain more information about Colorado Credit Reserve, Colorado Capital Access, and Cash Collateral Support, including a complete list of participating lenders, at www.chfainfo.com, or by calling CHFA at 800.877.2432.
About Colorado Housing and Finance Authority (CHFA)
CHFA finances the places where people live and work. Created in 1973 by the Colorado State Legislature, CHFA strengthens communities by making loans to low- and moderate- income homebuyers, affordable multifamily rental housing developers, and small and medium sized businesses. CHFA also provides education and technical assistance about affordable housing and economic development. CHFA is a self-sustaining public enterprise funded by issuing bonds. CHFA issued bonds are not obligations of the state. For more information about CHFA please visit www.chfainfo.com. Contact our Denver office at 1.800.877.chfa (2432), or our Western Slope office at 1.800.877.8450.