Cash Collateral Support

Cash Collateral Support Program Summary The Cash Collateral Support program helps small and medium-sized businesses in Colorado access loans that they would otherwise not get because they do not have enough collateral. This credit enhancement uses small amounts of public resources to encourage private lenders to loan money to businesses. The program provides a cash deposit as collateral for a business loan or credit facility when the business cannot meet the lender’s collateral requirements. One of the goals of this program is to support employee ownership business transitions and financing for employee-owned businesses. For additional resources visit the Office of Employee Ownership . Lenders can apply for up to 35% of the loan amount or $1,000,000, (for employee ownership, up to 40% or $800,000), whichever is less, in collateral to support business loan applications. There may be further flexibility for certain transaction types, including those that support employee ownership. The maximum loan size is $20 million. Collateral caps may be increased for certain transaction types, including those that support employee ownership . Benefits to lenders include: low-cost credit enhancement option deposits are held by the partner lender We along with the Colorado Economic Development Commission (EDC) have provided $15.2 million in funding for this program through federal Small Business Jobs Act of 2010 funds. The Colorado Housing and Finance Authority (CHFA) manages this program and is the main point of contact. Overview Type:  Credit enhancement For:  Businesses and lenders Amount:  Up to 35% of the loan amount or $1,000,000, whichever is less (Special use for employee-owned businesses). The maximum loan size eligible for this program is $20 million. Application deadline:  Rolling OEDIT division: Business Funding and Incentives Image description: Business testimonial highlighting that Colorado businesses love employee ownership programs. Quote from Rocky Mountain Steel, Inc. President, Dylan Wiman, “Moving forward, all Rocky Mountain Steel, Inc. employees will have the opportunity to financially benefit in a much bigger way for their hard work. Along with their excitement, we are already seeing a shift in mindset as they become employee-owners, even more committed to the company’s success.” Expand All Eligibility The business borrower needs to have fewer than 750 employees at the time of the financing. manufacturing organizations are eligible. Lenders need to demonstrate a: Collateral shortfall Reasonable expectation that the business borrower will repay the loan as agreed Lenders may use Colorado Housing and Finance Authority deposits on most types of business loans. Cash deposits are pledged as additional collateral to the lender for an initial term of three years. Deposit term lengths may be increased for certain transactions, including those that support employee ownership. After the initial term ends, the lender may request an annual extension of up to 10 years for longer-term loans. How to apply Because this program is not a direct lending program, both the borrower and the lender must complete their own parts of the application. The lender will submit the full package, including all supporting documents, to CHFA to review. If your lender is not familiar with the Cash Collateral Support program, you can connect them with Jaustin Vause, Commercial Loan Officer III, the primary point of contact for this program at CHFA. Use CHFA’s Forms and Documents web page to find all necessary applications and instructions that may be relevant to you: Cash Collateral Support Lender Application Cash Collateral Support Customer Application Cash Collateral Support Customer Application s in Spanish Borrower Fee

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