State Small Business Credit Initiative (SSBCI) Loan & Venture Capital Programs

1. State Small Business Credit Initiative (SSBCI) Loan & Venture Capital Programs Presentation at David Rodriguez Capital Programs

2. Overview of Enterprise Florida • Enterprise Florida (EFI) is Florida’s principal public-private economic development organization devoted to statewide economic development. • EFI works in collaboration with the Florida Department of Economic Opportunity and a statewide network of regional/local economic development organizationsto promote job creation and diversify Florida’s economy. • EFI focuses on a wide range of industry sectors, including clean energy, life sciences, information technology, aviation/aerospace, homeland security/defense, financial/professional services, and manufacturing.

3. What is SSBCI? Created as part of the Small Business Jobs Act of 2010, the State Small Business Credit Initiative (SSBCI) is managed by the U.S. Treasury Department to help states either strengthen existing loan and equity programs or create new programs. Leverage:Goal: 10 to 1 leverage EFI SSBCI Program: Small Business Loan Support Program $33,500,000 Florida Venture Capital Program$43,500,000 $77,000,000

4. Why does SSBCI makes sense? New reality • Increased pressure on lenders • Increased regulatory focus on “prudent lending” • Stringent compliance rules • Deterioration in collateral values • Credit scores negatively affected • Tighter “credit box” = Need for “credit-enhancements”

5. Small Business Loan Support Program • The Small Business Loan Support Program is designed to provide Florida’s small businesses with loans participations and loan guarantees to help them better access commercial bank and export financing. Loan Guarantees Loan Participations Export Loan Guarantees Export Direct Loans • Each transaction requires at a minimum, a matching equity investment or loan from a private source ($1 - for - $1 match). Goal: 10 to 1 Leverage! • For applications, please visit www.eflorida.com/ssbcior e-mail David Rodriguez at ssbci@eflorida.com.

6. Loan Guarantees Provides a lender with a partial guarantee as the credit enhancement required to ultimately approve a loan. • Typical guarantee will be between 5-20% of the loan amount, up to a maximum 50% (1:1 min) • Minimum $250,000 loan amount; maximum $5,000,000. • Maximum loan term permitted is five (5) years. • Interest rates and fees are negotiable. EFI Small Business Financial Institution Limited Guarantee Loan

7. Operating Mechanics of Loan Guarantees • Lender is responsible for underwriting the loan • Lender applies for guarantee • EFI reviews and approves the guarantee application, and issues commitment to the lender, outlining terms of guarantee • Lender obtains Borrower’s Certification, and executes Lender’s Certification (prior / at closing) for eligibility and compliances purposes • Guarantee Agreement is executed between Lender and EFI, specifying responsibilities and available remedies • Lender services the loan • EFI monitors repayment progress and servicing performance • If Borrower defaults on the loan, Lender executes available collateral • Lender submits a claim to EFI in accordance with Guarantee Agreement

8. Loan Participations Permits the purchase of a portion of the loan originated by the lender. • Typical loan participation will be between 5-20% of the loan amount, up to a maximum 50% (1:1 min) • Minimum $250,000 loan amount; maximum $5,000,000. • Maximum loan term permitted is five (5) years. • Interest rates and fees are negotiable. Financial Institution Small Business 100% of financing Purchasing portion of loan EFI

9. Operating Mechanics of Loan Participations • Lender underwriter and originates the loan • EFI reviews and purchases a portion of the loan • Lender obtains Borrower’s Certification, and executes Lender’s Certification (prior / at closing) for eligibility and compliances purposes • Participation Agreement is executed between lender and EFI, specifying responsibilities and available remedies • Lender services the loan • EFI monitors repayment progress and servicing performance • If Borrower defaults on the loan, Lender executes available collateral and proceeds in accordance with Participation Agreement (Pari-passu, etc)

10. Export Loan Guarantees & Export Direct Loans • Export loan guarantees and direct loans for Florida's exporting small businesses are available to assist in facilitating lower-cost export financing. These transactions are originated by Florida Export Finance Corporation, working in conjunction with Enterprise Florida. • An average export loan guarantee or export direct loan of $500,000 or less is targeted, with larger transactions permitted in exceptional circumstances. The maximum term permitted is 12 months.

11. Florida Venture Capital Program • Via the Florida Venture Capital Program, Florida Opportunity Fund provides equity investments and convertible debt instruments to emerging Florida companies (or companies locating in Florida) with perceived long-term growth potential. • Emphasis will be toward transactions within Florida's targeted industries, which include: • Aviation & Aerospace • Information Technology • CleanTech • Life Sciences • Financial & Professional Services • Advanced Manufacturing • Homeland Security & Defense

12. Florida Venture Capital Program • Equity investments and convertible debt instruments ranging from $1,000,000 - $3,000,000 are targeted, although larger transactions are permitted in exceptional cases. • Each equity investment requires at a minimum, a matching 1:1 equity investment or loan. • For applications, please visit www.floridaopportunityfund.com or e-mail Jennifer Dunham at jennifer@floridaopportunityfund.com.

13. SSBCI Advantages to Florida’s Small Businesses, Lenders & Investors SSBCI advantages to Florida's small businessesinclude: • Access to debt and venture capital financing that may not otherwise be available. • A flexible and non-bureaucratic source of capital. SSBCI advantages to Florida's lenders and investorsinclude: • Ability to approve a loan that might otherwise be declined. • Provides a non-competitor participant on loans and investments. • No cost to the small business lender or investor.

14. Eligible Participants The list of eligible companies is exhaustive. Some examples include, but certainly are not limited to: • Business Services • Contractors • Distributors • Exporters • Service Companies • Trucking Companies • Wholesalers

15. Ineligible Participants Additionally, the company cannot participate if it is: • a business engaged in activities that are prohibited by federal law or applicable law in the jurisdiction where the business is located or conducted. (Included in these activities is the production, servicing, or distribution of otherwise legal products that are to be used in connection with an illegal activity, such as selling drug paraphernalia or operating a motel that knowingly permits illegal prostitution); or • a business engaged in gambling enterprises, unless the business earns less than 33% of its annual net revenue from lottery sales.

16. Ineligible Participants The company cannot participate if it is: • a business engaged in speculative activities that develop profits from fluctuations in price rather than through normal course of trade, such as wildcatting for oil and dealing in commodities futures, unless those activities are incidental to the regular activities of the business; • a business that earns more than half of its annual net revenue from lending activities; • a business engaged in pyramid sales, where a participant’s primary incentive is based on the sales made by an ever-increasing number of participants.

17. Eligible Loan Purposes The loan/investment proceeds must be used for a “business purpose.” A business purpose includes, but is not limited to: • Startup costs • Working capital • Business procurement • Franchise fees • Equipment • Inventory • Owner-occupied real estate • Purchase, construction renovation or tenant improvements of an eligible place of business that is not for passive real estate investment purposes

18. Ineligible Purposes The loan/investment proceeds may not be used to: • acquire or hold passive investments such as commercial real estate ownership, purchase of securities; or financing lobbying activities, • repay delinquent federal or state income taxes unless the borrower has a payment plan in place with the relevant taxing authority; or • repay taxes held in trust or escrow, e.g. payroll or sales taxes; or • reimburse funds owed to any owner, including any equity injection or injection of capital for the business’ continuance; or • support unguaranteed potions of SBA-guaranteed or other federally guaranteed loans.

19. Questions? Jay Robinson Director, Capital Programs (407) 956-5607 David Rodriguez Manager, Capital Programs (407) 956-5682 www.eflorida.com/ssbci ssbci@eflorida.com