The Kentucky Small Business Credit Initiative

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 this program, please visit the Lender's Resource Page.

For further assistance, please contact us at 1-800-626-2930 or via email.

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:

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Kentucky Cabinet for Economic Development   Old Capitol Annex  300 West Broadway   Frankfort, KY 40601
502-564-7140 (local)   800-626-2930 (toll free)