Capital Access Program
The ADFA Capital Access Program makes funds available to borrowers who might otherwise have difficulty in obtaining conventional bank loans.
Although the Capital Access Program (CAP) is based on an insuring concept, it is different from the traditional type of insurance or guarantee program. It is based on a portfolio concept.
If a Lender participates in the Capital Access Program, a special reserve fund is set up to cover future losses from a portfolio of loans enrolled into CAP. The special reserve is owned and controlled by ADFA, but it is set aside for that specific Lender. Thus, each Lender participating in the program has its own earmarked reserve. A Lender can withdraw funds from its reserve only to cover losses on loans enrolled in CAP.ADFA, as administrator, is not a party to loan transactions and plays no role in underwriting, approving or servicing the loans. ADFA’s purely administrative role reduces paperwork while at the same time assuring risk-taking by lenders.
The average processing time for a loan is 3 to 5 days.
The Capital Access Program has been a lending incentive for working capital loans for several types of industry within the state, including agriculture, manufacturing, wholesale/retail, construction, and service.
Participating lending institutions build an earmarked off-balance- sheet loan loss reserve account each time they enroll a loan in the program.
A contribution is required to enroll the loan into the program. This contribution is paid by the Borrower (contribution can be financed as part of the loan) and shall not be less than 3% of the loan amount, nor greater than 7% of the loan amount.
This contribution is then matched by ADFA for a total of 7.5% of the loan amount (150% of enrollment contribution for the first $1million in loans, after which, ADFA matches Borrower contribution at 100%) as the contribution to a lender’s earmarked loan loss reserve account.
At a maximum, 7% of the loan amount is paid up-front and matched by ADFA for a total of 17.5% contribution to the loan loss reserve. ADFA owns and controls the reserve, but the reserve is designated for use by the bank and usually held on deposit at that bank.
The loan loss reserve fund is available on a pooled basis to be applied to any of the lender’s Capital Access Program loans. The fund is maintained on deposit with the lender, in ADFA’s name and invested at ADFA’s direction.
Along with the CAP enrollment form and required documentation for loan submissions, Lenders will also need to provide a PDF of the following business information on behalf of the borrower. Please use the preferred links to obtain this information to ensure that we are all working from the same updated information.
NAICS & SIC Identification Tools | NAICS Association:
FFIEC – Federal Financial Institutions Examination Council | Census Tract:
CDFI Investment Areas Identification Tool:
CDFI Public Viewer – Arkansas Map