California Treasurer Fiona Ma, CPA, has positioned the California Capital Access Program (CalCAP) as a powerful tool to expand access to capital, particularly for very small businesses and underserved entrepreneurs, including military veterans. While capital access is often discussed in financial terms, the real impact of programs like CalCAP is best understood through the opportunities they create on the ground: businesses launched, jobs created, and communities strengthened.

What is CalCAP and How Does It Work?

At its core, CalCAP works by reducing risk for lenders. Through credit enhancements the program provides a financial backstop that encourages banks, community development financial institutions (CDFIs) and other lenders to serve small businesses which otherwise may lack access to capital, including individuals just starting or purchasing businesses or businesses seeking to grow. In other words, all categories where many veterans fall as they transition from military service into business ownership.

For veterans, access to capital is one of the most critical and persistent barriers to entrepreneurship or small business ownership. Many leave the service with leadership experience, operational discipline, and technical skills, but lack the track record or collateral that lenders typically require. CalCAP can bridge that gap, allowing veterans to turn ideas into viable businesses.

This is how it works. When a bank enrolls a loan in CalCAP for Small Business, three parties each put a small portion of the loan value into a reserve fund: the bank, the borrower, and CalCAP. If the borrower unexpectedly goes under and defaults on the loan, the bank can recover money from this reserve fund, in some cases, up to 100 per cent of the loss.

In the CalCAP Collateral Support program, the bank and borrower pay a one-time fee, which results in 40% or 50% of the loan value being set aside to back that loan for up to five years. This program allows lenders to consider borrowers who are in a strong position except for sufficient collateral.

For veterans, this approach is especially helpful. It recognizes their potential as business leaders and job creators. Compared with their non-veteran counterparts, veterans often face significant barriers and unnecessary hurdles to securing critical capital, including higher denial rates and lower approval amounts for business loans. Despite proven and tested leadership experience, technical skills, resilience, discipline, and robust business plans, access to the financial resources required to start a new business and scale growth can be an uphill battle.

Why This Matters for Veteran-Owned Businesses

Loans and Lines of Credit Are Eligible with Versatile Use of Funds

Whether a business owner needs to purchase heavy equipment, renovate a new location, acquire inventory, or simply needs working capital, CalCAP enrolls loans for an array of expenses.

Microloans to Millions

Sometimes the smallest loan is as tough to obtain as a large loan, but there are lenders using CalCAP for Small Business to enroll loans as small as $1,200 up to $5 million, while CalCAP Collateral Support enrolls loans as large as $20 million.

Recognizing Veterans

Veteran status is a distinctly recognized and tracked category in the CalCAP enrollment documents. There also is a questionnaire which allows veterans to indicate how their veteran status may have impacted their access to credit, allowing CalCAP to recognize that loan as potentially eligible to receive additional support.

Disaster Relief

If a business is located in a "Severely Affected Community", such as areas hit by wildfires or other natural disasters, or high unemployment, CalCAP provides extra support funds in these circumstances.

Treasurer Ma has placed a major emphasis on scaling up CalCAP, using federal funding to break down barriers that often keep veteran-owned businesses from getting the capital they need to grow and giving them the lifeline they need. Treasurer Ma’s support for CalCAP goes beyond treasury management; it is a strategic effort to boost economic equity. By reducing risk for lenders and expanding access to capital, Treasurer Ma is ensuring that California's economy remains the strongest in the nation, one small business loan at a time.

“Veterans bring leadership, discipline, and innovation to California’s economy, and programs like CalCAP help open the door to the capital needed to turn that potential into thriving businesses. By expanding access to financing, we are investing not only in veteran entrepreneurs, but in stronger communities and a stronger California,” Treasurer Ma said.

The upcoming American Veterans Group webinar featuring Treasurer Ma and CalVet Secretary Lindsey Sin provides an opportunity to highlight how public finance tools such as CalCAP intersect with veteran-focused initiatives. It underscores a key point: that economic policy and social impact are not separate pursuits. When structured effectively, they reinforce one another. Expanding access to capital for veterans is the right thing to do and a smart investment in the state’s economic future.

From a veteran’s perspective, the ability to secure financing is often the turning point between aspiration and action. It determines whether a business plan remains an idea or becomes a source of income, independence, and purpose. CalCAP helps make that transition possible by making capital more accessible.

 Join our upcoming webinar with California State Treasurer Fiona Ma, CPA, to hear how CalCAP and related initiatives are translating policy into real outcomes for veterans and their families.