1. Capital Access Corporation Kentucky SBA 504 Loan Program

2. US Small Business Administration 504 Loan Program Fixed Interest Rates 10 or 20 year term 10% Borrower equity

3. Purpose of 504 Program Assist healthy & growing small businesses by participating with lending institutions to provide fixed-rate, long-term financing of fixed assets. To provide long term fixed-asset financing to eligible and healthy small businesses at a reasonable rate.

4. Accessing the SBA 504 Loan Program Capital Access Corporation – Kentucky will provide access to the SBA 504 Loan Program. Our geographic territory consists of; Statewide

5. Eligible Businesses Project located in our territory Business must be for profit Business net worth less than $7 million Average income for the last two years cannot exceed $2.5 million Initial owner occupancy standard: 51% for existing building, 67% for new construction

6. Eligible Projects Fixed assets such as Land and new building construction Existing building purchase Building renovation Machinery and Equipment

7. Project Size Project (Amount) CAC – Ky. (Amount) Minimum Maximum $120,000 Unlimited $50,000$1,500,000* *If a policy goal of SBA is met, CAC – Ky. Loan can be $2,000,000

8. SBA Public Policy Goals Rural Development Business District Revitalization Expansion of Exports Minority Business Development Woman Owned Business (51%) Veteran Owned Business (51%)

9. Typical 504 Project Fixed Asset Lender (7 or 10 year minimum term) CAC – Ky. (10 or 20 year fixed rate) Borrower Total Project $1,000,000 50% $500,000 40% $400,000 10% $100,000 100% $1,000,000

10. Lender Loan If CAC – Ky.’s loan is 20 years, the bank loan must be at least a 10 year term. Real Estate Loans. If CAC – Ky.’s loan is 10 years, the bank loan must be at least a 7 year term. Equipment Loans. Rate negotiation are between bank and customer. Balloon payments are allowed

11. Advantages to Lending Institution 1 st Mortgage on property financed 50% loan to value Improved cash flow CRA Credit Capital Access Corp – Ky. Works directly with the client

12. Advantages to Borrower Conserve working capital – 10% down payment Offset interest rate risk – 40% of project tied to fixed rate Extended amortization provides lower monthly payment Improved collateral position for bank often results in more lending capacity for other needs and lower rates

13. Rates Established at the time of the bond sale, after the project is complete Typically lower than conventional Fixed for the life of the loan!

14. Predefined Prepayment Penalty Effective for first half of the loan For a 20 year note, starts at the note rate in the first year and decreases 10% a year for 10 years For a 10 year note, starts at the note rate in the first year and decreases 20% a year for 5 years Company incurs no penalty if prepays loan in: - year 11 of a 20 year bond - year 6 of a 10 year bond

15. Additional Program Specifics Personal resource test implemented Single purpose facilities required additional 5% equity injection Start-up businesses require an additional 5% equity injection Job Creation standard of 1 job created for every $50,000 Capital Access Corp – Ky. Lends must be met

16. For More Information Call: Capital Access Corporation- Kentucky 120 Webster Street, Suite 330 Louisville, Ky. 40206 (502) 584-2175