Training Manual January 2005 Personal and Confidential. © 2005 Allied Merchant Capital

Credit Card Processing Overview Cash Advance Product –Overview –Cash Advance vs. Loan –How It Works –Procedure –Use of Proceeds –Competitors Allied Merchant Capital

Credit Card Processing Overview Types of Accounts –Retail, Mail Order/Telephone Order (MOTO), Internet/Ecommerce Risk to the processor with merchant accounts / chargebacks Fee Structure: Discount Rate, Transaction Fee, Statement Fee, AVS Fee, Transaction Fee, Chargebacks Mid / Non Qualified Rates Companies in the marketplace: Chase, FDC, Heartland Payment, NOVA Backend networks: Vital, Paymentech, First Data Terminal Types: Hypercom, Tranz, Nurit, Verifone POS Systems – Squirrel, Aloha, Micros

Working Capital Overview Advance money to merchants against their future Visa/Mastercard sales Must be in biz 1 yr (will consider restaurants who are less than 1 yr w/ previous ownership/mgmt experience) Must process at least $2,500/mo in Visa/Mastercard from their customers Must be current with their landlord Can not have any open bankruptcies or tax liens Funds can be available in 7 days or less (if there is no POS system involved)

Working Capital Program Cash Advance vs. Loan Loan –Fixed time period –Fixed interest rate –Fixed monthly payment –Usually secured with hard assets/Personal Guarantee –Majority of small businesses are declined by banks for loan requests Business Cash Advance –No fixed time period – payback is based on a % of their future sales. Works with their cash flow, if sales slow down, payback slows down –No fixed interest rate –No fixed monthly payment to worry about –No hard assets to secure it with

Working Capital Overview – How It Works Buying a merchant’s future Visa/Mastercard sales today at discount – typically.74 on the $1 We advance them $X for the right to buy back $Y worth of their future sales. We do this by taking a % of their future Visa/Mastercard sales going forward They need to switch their credit card processing to one our processors so we can control they pack – we match their current rates. We base the amount we can advance them and the holdback % typically on an average of their last 4 months worth of Visa/Mastercard sales.

Working Capital Overview - Procedure Procedure: Merchant provides salesperson with their last 4 months worth of Visa/Mastercard statements (if seasonal, coming up months, etc.). Salesperson provides merchant with a proposal with various advance amounts, payback amounts and takeback %s. Once merchant agrees to a program, salesperson needs the following from the merchant: –Signed working capital agreement –Working capital checklist (more detailed info – landlord info, trade references) –Last 4 months worth of bank statements –Signed merchant account agreement –Copies of articles of incorporation or business license –Signed bank verification letter –Copy of blank voided check / driver’s license

Working Capital – Use of Proceeds Need to cost justify the money –Inventory – eg. Take $20K of our money, to buy goods that will be resold at $60K –Buying out a partner – no matter how expensive our money is, always cheaper then giving away X% of the profits –Opening New Locations –Renovation – take $X from us that will create more than $X in revenue in the future – eg. Building a party room in a restaurant that can yeild $100Ks of revenue overtime. –Advertising