1. Show Me the Money Traditional Financing March 4-5, 2003 Presented by: Mercedes McCall, Region Executive S. Craig Suazo, Senior Vice President Banco Popular North America Orlando, Florida

2. BANCO POPULAR COMMITMENT HISTORY Since its inception, over 100 years ago, Banco Popular has been committed to serving small business owners and promoting the economic development of the communities it serves. Banco Popular, in partnership with SBA, launched its Small Business initiative in 1994 in the U. S. mainland. Our U. S. strategy followed in the footsteps of Puerto Rico’s SBA initiative with roots from the beginning of Small Business Administration. â Premier Community Bank in the markets we serve, while leveraging our Hispanic heritage. â Presently located in 6 states, representing 80%+ Hispanics. â Top 10 small business lenders in the country and one of the top Minority lenders. â Banco Popular is PLP in each domiciled state and participates in SBA lending in most other states.

3. A Question… How do most businesses obtain capital? n Personal savings or debt n Gifts from relatives n Sale of personal assets n Investors n Financing –(Traditional and SBA)

4. What is Financing? Bringing in an outside infusion of cash for the benefit of your business, but at a cost.

5. Let’s Talk About Traditional Financing n Real Estate Financing n Line of Credit Financing n Equipment Financing n Leasing n Business Credit Cards

6. What do I need?  3 Years Business Financials and Returns  3 Years Personal Returns  Current Personal Financial of Owners  Business Plan, if a Start-up  Projections, if historical financials cannot support repayment of debt  Other documents to support type of request

7. Now, Let’s Talk About Those Four Wonderful Things... n Collateral n Interest Rates n Terms n Guarantees

8. Collateral Real Estate:  Generally 75% of the value or purchase price, whichever is less. Can be used for construction (need contract), purchase (need buy/sell) or refinance (need copy of notes).  Bank-approved appraisal required. Line of Credit:  Inventory:25% – 50% depending on marketability and liquidation parameters.  Accounts receivable:50% – 80%, depending on quality, aging and collect ability.  Aging required.

9. Collateral (cont.) Equipment:  50% - 80% of value or purchase price (new), whichever is less.  25% - 50% of value or purchase price (used), whichever is less.  May require a third party appraisal under certain circumstances.

10. Collateral (cont.) Leasing:  80% - 100% of purchase price (new), depending on lease factor and type of lease. Business Credit Card:  Unsecured or UCC secured.

11. Interest rates  Real Estate: –Variable to Prime or LIBOR –Adjustable every 3-10 years –Fixed for 5 years  Line of Credit: –Variable to Prime  Equipment: –Variable to Prime –Fixed for 5 years

12. Interest rates (cont.)  Leasing: –Lease Factor –Calculated on type of lease and term of lease –Calculated on Residual Values  Business Credit Card: –Adjustable to Prime –Fixed

13. Terms  Real Estate: –Principal plus Interest (faster amortization) –Principal and Interest (straight amortization)  Line of Credit –Interest Only, with principal due at maturity OR on demand

14. Terms (cont.)  Equipment: –Principal and Interest (straight amortization)  Leasing –Principal and Interest (straight amortization)  Business Credit Card –Principal due each month –Annual Fee

15. Are You Going to Ask For My Personal Guarantee? Rental House? First Born?  Yes, Maybe, No.  Remember, the bank has its investment (the loan) at risk.  The following is required: –Personal guarantees for all 20%+ Owners –Key man life insurance –Unsecured or secured guarantee

16. How Long Does it Take?

17. Real Estate: 6-8 Weeks Line of Credit: 2-3 Weeks Equipment: 2-3 Weeks Leasing: 1-2 Weeks Credit Cards: 1-2 Weeks

18. What Else? n Appraisals n Title n Insurances (Hazard, Life, Flood) n Survey n Invoices n Environmental Audit n Licenses

19. BANCO POPULAR FLORIDA BRANCHES Central Florida Sanford Sanford 251 West 1st Street Deltona Deltona 1200 Deltona Boulevard Altamonte Springs Altamonte Springs 450 East Altamonte Drive Semoran Boulevard Semoran Boulevard 430 North Semoran Blvd. Orange Avenue Orange Avenue 1118 South Orange Avenue Whisper Lakes Whisper Lakes 11681 South Orange Blossom Trail Oak Ridge 2300 Oak Ridge Road Boggy Creek - Kissimmee 2590 Boggy Creek Road Vine Street - Kissimmee 1410 Vine Street South Florida Miami 7500 S.W. 8th Street

20. SBA Financing Robert Chavarria Economic Development Specialist US Small Business Administration