Maryland Capital Access Program (MD CAP)

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The Maryland Capital Access Program (MD CAP) is a financing resource administered by the Department of Commerce to stimulate opportunities for small businesses that may have difficulty in obtaining business financing by establishing a Loan Reserve Program.

MD CAP encourages banks and other financial institutions to make loans to small businesses that have difficulty obtaining financing. If you own a small business and need a loan for start-up, expansion or working capital, you may receive more favorable loan terms from a lender if your loan is enrolled in the MD CAP Loan Loss Reserve Program. This program helps communities by providing financing to small businesses that create jobs and improve the economy.

Lenders are encouraged to apply for registration so they can become positioned to assist borrowers should funding for the program become available. The application form for lenders can be found here..pdf)

MD CAP may provide up to 100% coverage to participating lenders on losses as a result of certain loan defaults. With MD CAP portfolio support, a lender may be more comfortable underwriting small business loans. ELIGIBILITY Participating Lenders Must be a credit union, financial institution or community development financial institution; Must complete the MD CAP application and become certified by Commerce as a participating MDCAP lender; Must enroll a qualifying loan not more than 30 days after the date of the first disbursement of the loan; and May enroll all or a portion of a qualifying loan in an amount not more than $250,000. Qualifying Borrowers Most Maryland small businesses, including nonprofit organizations, are eligible. Borrower must qualify as a small business under SBA size standards; Must apply to a participating lender for business financing; and Have fewer than 50 employees. Qualifying Loans Must satisfy the lending criteria of the lender; Have a term not exceeding ten years; May be short or long term, have a fixed or variable rate of interest, and be secured or unsecured; and May not exceed $250,000. Restrictions

Loans for the following types of projects and activities will not be considered for enrollment: Financing of passive real estate ownership. Residential living facilities, e.g., multifamily or single-family housing developments, nursing homes, assisted living facilities, crisis care centers, group homes, transitional housing, and homeless shelters. Adult bookstores, adult video shops, other adult entertainment facilities, check cashing facility, gambling facilities, liquor stores, massage parlors, pawn or gun shops, tanning salons, or tattoo parlors. Financing for the furtherance of sectarian religious instruction. HOW THE PROGRAM WORKS A small business applies to a participating lender. The lender underwrites and enrolls a qualifying loan (or portion of a loan). Typical loans under this program would be those that fall slightly outside the lender's normal credit guidelines. The lender, borrower, and the Maryland Capital Access Program deposit their contributions into a reserve account. Typically, the borrower and lender make up one-half of the contribution and MD CAP matches that amount. An example would be: 2.0 percent from the lender (minimum) and 1.0 percent from the borrower, for a total of 3 percent, and a 3 percent match from the Maryland Capital Access Program, for a total of 6 percent of the original loan amount for the reserve account. The lender determines the amount of contribution within a range established by the Maryland Capital Access Program. A one-page Loan enrollment form with summary information…

Topic areas: Public Policy and Governance.

Funding amount

This grant provides Varies in funding.

Deadline

Applications are accepted on a rolling basis; there is no single fixed deadline.

Who can apply

This opportunity is open to the following applicant types:

• Not specified by the program.

Eligibility

The program did not publish a separate eligibility statement. See the official opportunity page for the full eligibility criteria.

Agency

Maryland Capital Access Program (MD CAP) is administered by Maryland Department of Commerce (MD Commerce), listed via Maryland Department of Commerce.