What is the U.S. Department of Education's Capital Financing Program?
In 1994, a Designated Bonding Authority (DBA) was established to act as the agent for the Department. The DBA establishes all loan criteria that would allow most HBCU's to qualify for loans. Provided the school has qualifying financials, the DBA could finance capital projects for housing, dining and instructional facilities, in addition to many other projects.
What is the Commerce Capital Access Program (CCAP)?
Commerce Capital Access Program Corporation is the programs' DBA. CCAP was established as the designated bonding authority for the HBCU Capital Financing Program. CCAP works with schools to qualify projects and determine if a school has the necessary credit standing to qualify for a loan.
Who is eligible to apply?
Any Historically Black College or University that was established prior to 1964, whose principle mission was…and is…the education of Black Americans.
How long does it take to determine if you are eligible for a loan?
It takes about 30 minutes to fill out a brief preliminary application that reviews enrollment figures, operating revenue and expenses, and a brief project description. This review is completed before the school uses precious time and resources for the application process.
How long does it take to fund the loan?
After CCAP receives required financial and project documentation, it takes approximately 2-3 months to process the loan. Only schools that meet program guidelines, according to a review of the preliminary application and other requested materials, are considered for a decisional memorandum submitted to the U.S. Department of Education.
Have you been unable to borrow in the tax-exempt market?
Unlike the tax-exempt market, the decision is not made by the rating agencies, insurers or investors. A school is only required to meet CCAP's and the Department of Education's minimum criteria to qualify for a loan.
How large can the loan be?
Typically, the loan size is $7 to $10 million. The loan can be for a larger amount with approval of the DBA and the Department of Education.
What is the typical borrowing rate?
The typical borrowing rate is approximately the U.S. Treasury rate. Even the largest companies do not get this rate!
Can you get a better rate in the tax-exempt market?
With the exception of a few schools, most HBCUs can not access the municipal markets at reasonable interest rates. While there are several HBCUs that can get an investment grade credit rating or "AAA" bond insurance, the vast majority of HBCUs will receive lower interest rates through CCAP.
Can you refinance high-interest loans for capital projects and equipment?
Yes. CCAP can refinance eligible projects, usually at a lower rate.
Can you use this program with other programs?
Absolutely! CCAP has reviewed programs such as those promoted by Honeywell, Johnson Controls and other vendors. These types of projects are eligible and will help some schools qualify for a loan.
Want to know more?
Call Samuel Bacote at 404-880-3309.
Commerce Capital Access Program Corporation
235 Peachtree Street, Suite 400
Atlanta, GA 30303
