Every time a lender underwrites an eligible loan under this programme, the Connecticut Green Bank reserves a percentage of the loan principal (between 7.5-15%) for the lender in the event of a default (Energize CT, 2013). In the Connecticut model, to promote sound lending practices and share risks, the lender assumes the “first loss” (1.5%) on its portfolio before it is permitted to access the reserve fund. When discussing credit enhancement, the terms guarantee and insurance are often used interchangeably.