The Kentucky Cabinet for Economic Development has been approved by the United States Department
of Treasury to receive the Commonwealth of Kentucky’s allocation of federal funding to implement
the Kentucky Small Business Credit Initiative (KSBCI).
The initiative includes three distinct credit enhancement programs designed to generate jobs and
increase the availability of credit to small businesses by reducing the risk participating lenders,
credit unions, and community development financial institutions assume. KSBCI will leverage funding
from these private lenders to help finance creditworthy small businesses that would typically fall
just outside a lender’s normal underwriting standards.
The three programs that compose KSBCI are:
- Kentucky Capital Access Program (KYCAP): Offers loan portfolio insurance to private financial
institutions, thus encouraging them to lend to creditworthy small businesses, by providing a matching
contribution to a lender’s loan loss reserve account when they extend credit to qualified small businesses.
In the case of a loss, the lender may draw against the account to offset a loss. For more information
about KYCAP, see the
KYCAP Guidelines.
- Kentucky Loan Participation Program (KYLPP): Assists borrowers whose cash flow does not meet a
lender’s coverage requirements by allowing CED to purchase (or participate in) a portion of the loan from
the lender and offer the borrower, on that portion, a payment-free grace period up to 24 months. For more
information about KYLPP, see the
KYLPP Guidelines.
- Kentucky Collateral Support Program (KYCSP): Provides a pledged asset (cash) to a lender for consideration
in making a loan to a small business, thereby enhancing the lender’s ability to underwrite the loan. For more
information about KYCSP, see the
KYCSP Guidelines.
Any loan to be enrolled under these three credit enhancement programs by a
participating lender
should support financing for small businesses in Kentucky. The terms and conditions of the loans will be determined by
the lenders and borrowers. Loans may be in the form of lines of credit, in which case the amount of each loan will be
calculated as the maximum amount that can be drawn down against that line of credit. In some cases, refinancing may
be available.
If you are a small business owner seeking financing, please contact a
participating lender to start the process.
If you are a qualified small business lender and would like to participate in these programs, please contact:
J. Don Goodin
Kentucky Cabinet for Economic Development
Department of Financial Incentives
300 West Broadway
Frankfort, KY 40601
(502) 564-4554
Additional Resources:
For assistance in translating the KSBCI pages to another language, please visit these suggested sites:
Para la ayuda en traducir las páginas de KSBCI a otra lengua, visite por favor estos sitios sugeridos:
Google Translate
Babel Fish