Credit Enhancement Techniques For Small And Mediumn Businesses

As one of the largest Kentucky-based community banks and a leading lender to small businesses !e are confident that the SSBC" #rograms !ill #ro$ide much needed ca#ital to ensure continued gro!th o##ortunities for home gro!n businesses that #lay such an im#ortant role in communities throughout the Common!ealth % said Ste$e Trager chairman and CE& of 'e#ublic Bank( Credit enhancement is used to obtain better terms for an outstanding debt( Securiti)ation #osting collateral and obtaining e*ternal credit enhancement such as a letter of credit are some basic forms of credit enhancement( Firms may also increase cash reser$es or take other internal measures to u#hold su#erior sol$ency ratios(

As a longtime ad$ocate for small business " can see this initiati$e hel#ing to create +obs all o$er Kentucky % said 'e#( Tanya ,ullin of South Shore( -This announcement could not come at a better time for small business( " !ant to thank .(S( Treasurer 'osie 'ios /o$( Beshear and the Kentucky Cabinet for Economic 0e$elo#ment for their attention to small businesses( Today1s announcement !ill long be remembered as a high #oint for small business +ob creation(% Can2t get a credit card !ithout a credit history and can2t get a history !ithout a card3 Break the catch-44( 5o! To Establish A Credit 5istory

6hen considering using credit enhancements to im#ro$e yourtransactions use these guidelines7 try to get a fair andob+ecti$e assessment of your credit #rofile and the inherenttransaction risks from a kno!ledgeable credit #erson8 takein$entory of the #ossible credit enhancements your firm can#ro$ide8 e$aluate the cost of #ossible enhancements to decide!hether using them !ill be !orth!hile8 if there is time ando##ortunity for a second chance to #resent your transaction tothe credit #ro$ider #resent it first !ithout the creditenhancement or !ith the minimum enhancement you thinkacce#table8 of the credit enhancements a$ailable to your firm decide !hich ones !ill be effecti$e and the degree ofenhancement necessary to achie$e your ob+ecti$es(

"t is critical for the issuer to e*amine each form of credit enhancement #rior to issuance to determine the enhancement mechanism or combination of credit enhancement mechanisms that is most cost effecti$e( 0ue to changing market conditions the least e*#ensi$e form of credit enhancement today may not be the least e*#ensi$e in a subsequent securiti)ation transaction( Com#etition analysis7 0etails based on e*tensi$e market and industry research of the client1s main com#etitors( ,otential in$estors can see ho! !ell a com#any understands the market !ho its com#etitors are and ho! they might im#act sales and #erformance(

&n Se#tember 9: 4;9< the California ,ublic .tilities Commission =C,.C or Commission> a##ro$ed a #ilot on-bill re#ayment #rogram that #ermits nonresidential customers of the state1s large in$estor-o!ned utilities ="&.s> 9 to obtain #ri$ate ca#ital for energy efficiency retrofits and distributed generation and

demand res#onse #ro+ects !ith re#ayment made on the customer1s utility bill( 4 Through this #ilot the Commission aims to test the hy#othesis that the utility bill re#ayment mechanism !ill attract ne! #ri$ate ca#ital o$ercome lending barriers and lo!er borro!ing costs for energy efficiency and clean energy #ro+ects in the commercial and industrial sector( ?isit our !ebsite htt#7@@!!!(creditenhancement#ros(com@