The Colorado Credit Reserve program helps businesses that typically struggle to get access to a bank loan. The program helps lenders make loans by establishing a loan loss reserve account with the lender as additional security.
To get a loan through this program, the borrower pays a fee of 1% of loan principal, which we match. Borrower and program fees fund the loan loss reserve.
Each participating lender:
- makes the underwriting decisions
- sets the terms
- services the loan
We financially support the Colorado Credit Reserve Loan. The Colorado Housing and Finance Authority manages the program.
In its first 10 years, this program gave more than $24 million in small business loans. In 2010, Colorado changed the program to increase reserve funds for loans made to:
- women- and minority-owned businesses
- businesses in enterprise zones
- rural businesses
A Colorado Credit Reserve Loan borrower needs to:
- be engaged in a trade or business primarily in Colorado
- contain the primary economic benefit of the loan in Colorado
Women- or minority-owned businesses, rural businesses, and businesses in enterprise zones may receive priority for this program.
Business are not eligible for the Colorado Credit Reserve Loan if they fall in these categories:
- pyramid sales distribution plans
- political or lobbying activities
- private or commercial golf courses, country clubs, massage parlors, hot tub facilities, and suntan facilities
- racetracks or other facilities used for gambling
- sale of alcoholic beverages for consumption off premises
- governmental entities
- engaged in illegal activities under federal, state, or local laws
- principal of business is incarcerated, on probation, on parole, or has been indicted for a felony or a crime of moral turpitude
- engaged in teaching, instructing, counseling, or indoctrinating religion or religious beliefs
- present live performances of a sexual nature or derives more than 2% of gross revenues from the sale of products or services of a sexual nature
A Colorado Credit Reserve Loan can fund:
- working capital
- contract financing
- lines of credit
- real estate projects for small businesses
A Colorado Credit Reserve Loan may not fund:
- refinancing of debt on the books of the lender or affiliate bank, except in the case that a registered loan is renewed or extended
- loans to executive officers, directors, or principal shareholders of a lender, or family members of the same
- financing for housing
- loans guaranteed by the Small Business Administration or U.S. Department of Agriculture
- financing for investment real estate
Participating lenders can make Colorado Credit Reserve Loans to eligible borrowers. Talk to your lender about registering or visit the Colorado Housing and Finance Authority website for a list of participating lenders.