1. BANKING. INVESTMENTS. INSURANCE. Taking the Mystery Out of SBA Lending Presented by: Ed Lomasney Vice President, Business Banking The 504 Advantage:

2. BANKING. INVESTMENTS. INSURANCE. About Eastern Bank Business Credit: A 3-Legged Stool The SBA Program at Eastern Bank – 504 Loan Program – Other SBA Programs

3. BANKING. INVESTMENTS. INSURANCE. About Eastern Bank Founded in 1818, largest mutually owned bank in New England with over 100 branches. Largest commercial bank headquartered in Boston; local decision making. # 1 SBA Lender in MA for 5 consecutive years, process over 500 SBA loans a year. Customer Satisfaction – JD Powers & Associates

4. BANKING. INVESTMENTS. INSURANCE. Business Credit: A 3-Legged Stool Cash Flow Collateral Character

5. BANKING. INVESTMENTS. INSURANCE. Cash Flow / Capacity What is your ability to repay the loan? How are the proceeds to be used? How will they be repaid? How can your lender be sure of your ability to repay the loan? What can you offer the lender in the event of a default? Collateral

6. BANKING. INVESTMENTS. INSURANCE. Character Who are you? What are your FICO / D&B Scores? Where is the business located and for how long? Do you live up to your obligations? What do your suppliers say about you? – Are their liens or judgments against you?

7. BANKING. INVESTMENTS. INSURANCE. The SBA programs at Eastern Bank: Eastern has a number of diverse lending products for business customers – 504 Program for Commercial Real Estate and long term equipment deals – 7a Program for large equipment purchase, debt refinancing needs and acquisition of businesses – Express Program for working capital lines of credit

8. BANKING. INVESTMENTS. INSURANCE. Finances acquisition of CR/E and major fixed assets Finances acquisition of CR/E and major fixed assets 20 year fixed rates available 20 year fixed rates available Power down payment Power down payment – 50% 1 st MTG with Bank – 40% 2 nd MTG with CDC / SBA – 10% down from borrower Why we are here – the SBA 504 Program

9. BANKING. INVESTMENTS. INSURANCE. 504 Loan Program 10% Required – Allows borrower to keep more money in the business – Takes less time to save for down payment Conventional CRE Lending 20% to 30% Required – With the larger down payment, monthly payment tends to decrease Comparison of 504 vs. Traditional CREM: Down Payment

10. BANKING. INVESTMENTS. INSURANCE. 504 Loan Program Two Loans – Bank 1 st Mortgage for 50% of purchase price, see  – CDC 2 nd Mortgage for 40% – 20-year Fully Amortized: 20-year rate lock, 20-year note, 20-year amortization – No interest rate risk. Conventional CRE Lending One loan for up to 80% LTV 5-Year rate lock typical 10-Y note typical, resetting 25-Y amortization Structure of Lending Comparison of 504 vs. Traditional CREM: Structure

11. BANKING. INVESTMENTS. INSURANCE. 504 Loan Program 10% Down Payment = $100K $500K 1 st MTG approx. = $2,850/M* $414K 2 nd MTG = $2,780/M** 1 st MTG Balloon at 10-Years, $380K In addition to normal closing costs, add $1,250 to 1 st MTG. $14K fee on 2 nd MTG is rolled into financing above. * 4.75% 1 st, ** 5.2% 2 nd, $14K fees financed Conventional CRE Lending 25% Down Payment = $250K $750K MTG approx. = $4,275* Balloon at Ten Year = $568K Fees between $10-$20K for normal closing costs. * Assumes 4.75% 1 st MTG rate Comparison of 504 vs. Traditional CREM: An Example, $1MM purchase

12. BANKING. INVESTMENTS. INSURANCE. In addition to the 504 loan program, we have additional options to help small business owners obtain access to capital – SBA Express: Preferred Term Loans up to $100,000 (credit scored) – SBA Express: Preferred Line of Credit up to $50,000 (credit scored) – SBA 7(a) Program: Used to Refinance existing business debt, purchase equipment, acquire new business, working capital lines, etc. – Other options: SBA Preferred Lender Program, Patriot Express, Export Express, etc. Other SBA Loan Programs at Eastern Bank:

13. BANKING. INVESTMENTS. INSURANCE. Questions or Notes? _____________________________________

14. BANKING. INVESTMENTS. INSURANCE. Ed Lomasney Vice President Business Banking Direct Line- 781-598-7774 Cell Phone- 978-979-2524 eFax Line - 781-4771369 e.lomasney@easternbank.com 37 Foster Street, Peabody, MA 01960 www.easternbank.com e.lomasney@easternbank.com Contact Information