In the midst of a broad credit crisis, and in the wake of the demise of Lehman Brothers Inc., the primary broker-dealer entity in the Lehman group, major US prime brokers are scaling back dramatically on the range of services they provide to hedge funds, and the hedge funds to whom they are willing to provide such services.  Most notably, prime brokers are dialing back on their traditional role as lenders to hedge funds – making fewer loans, reducing the ranks of eligible borrowers, increasing fees and interest rates and expanding collateral requirements.  Prime brokers are also reigning in other categories of services that, just a short time ago, they competed to offer to hedge fund clients.  In response to the narrowing range of services and the diminishing group of US prime brokers providing those services, hedge funds are looking to non-US financial institutions to establish so-called “enhanced prime brokerage” arrangements.  Such arrangements are similar to traditional prime brokerage arrangements, in terms of the range of services they may entail, but usually involve two distinguishing factors: a non-US financial institution, as opposed to a US broker-dealer subsidiary of a major investment or commercial bank, and enhanced lending capacity available to the hedge fund.  We describe what enhanced prime brokerage arrangements are, how they differ from traditional prime brokerage arrangements, the risks and benefits of enhanced prime brokerage arrangements and how hedge funds can protect themselves against the risks while accessing the benefits.