Fraud Prevention Tactics – How to protect your business April 8, 2008

1. Fraud Prevention Tactics – How to protect your business April 8, 2008 Borrowing During Uncertain Economic Times: What You Need to Know July 16, 2009

2. What is the SBA? Why SBA and Why Now? Recovery Act SBA Provisions…won’t last forever! Value proposition of stimulus provisions Expanded size standard SBA Borrower Benefits SBA Lending Overview SBA eligibility SBA loan programs overview SBA assistance beyond loan programs Resources Q&A Agenda

3. What is the SBA? U.S. Small Business Administration Established in 1953 by an act of Congress Independent agency SBA maintains and strengthens the nation's economy by aiding, counseling, assisting and protecting the interests of small businesses Four primary areas of assistance: Advocacy Management Procurement Financial assistance

4. Why SBA and why now? These are the provisions of the American Recovery and Reinvestment Act of 2009 (the “Recovery Act) (P.L. 111-5):

5. Temporary elimination of SBA guaranty fees normally paid by borrowers has real economic value: Preserves working capital – or – reduces interest charges had the fee been financed Some examples of fee savings: $1,000 on $100k EXP LOC $5,250 on $350k EXP Term $26,250 on $1MM PLP Term $53,750 on $2MM PLP Term Temporary increase to the SBA guaranty percentage on nearly all SBA loan programs was beneficial for Lenders The market is still awaiting the benefits of other to-be-implemented Stimulus Provisions Value proposition ofprovisions

6. Great News…Nearly ALL businesses are now eligible for SBA loans from a size standard perspective

7. SBA has implemented an Interim Final Rule effective May 5, 2009 that allows Lenders to use an Alternate Size Standard until September 30, 2010. Eligibility can now be based on… 1)The “traditional” size standards for revenue or employees determined by NAICS code Manufacturer and wholesaler size standard based on number of employees Contractor, retailer, service company size standard based on three-year average of annual revenue (including any affiliates) 2)A “NEW” Size Standard based on net worth and average net income Net worth for company and all affiliates can not exceed $8.5MM Average Net Income after federal taxes (excl. carry-over losses) for the previous two fiscal years can not exceed $3.0MM SBA “works” for: For-profit companies, family-owned and closely-held companies Eligible uses of loan proceeds: real estate, equipment, leaseholds, working capital, inventory There’s nothing “small” about SBA

8. When should a borrower consider an SBA-enhanced financing solution...when these business characteristics are present: Emerging businesses/start-ups Seasonal businesses/cyclical industries Change of ownership/stock purchase/business acquisition Service companies High growth businesses Nature of collateral Collateral insufficiency Insufficient borrower down payment Long-term fixed asset acquisition and investment (via SBA 504) To gain a non-balloon payment financing structure Business Characteristics that “fit” the SBA profile

9. How do SBA financing alternatives benefit borrowers? Reduced breakeven with improved cash flow (via longer allowable amortization schedule) Increased investable cash flow to fuel growth Long-term security (reliable fixed payment; credit availability; known interest expense) Sustainability / Economic Downturns (guaranteed portion is considered “pass” credit which translates into “staying power” for both Bank & Borrower) Confidence and pride in working with a nationally recognized leader in financing family-owned and closely-held businesses via SBA and other government guaranteed financing solutions Competitively Differentiated loan proposals (customers receive choices from their Bank of choice) Improved flexibility of capital investment (higher advance ratios often apply) SBA benefits: clients and prospects

10. Be an operating business and organized for profit Be located in the U.S. and meet the SBA size standard for “small business” Demonstrate a need for the desired credit; show that funds are not available from other sources, including personal resources; and have Lender certify that desired credit is not available elsewhere on reasonable terms Lender must have reasonable assurance of repayment in a timely manner from the cash flow of the business SBA eligibility considerations Here are some of the basic eligibility conditions that must be met in order to obtain an SBA loan:

11. Loans to non-profit entities, or engaged in political or lobbying activities Loans to businesses primarily engaged in lending (banks, finance companies, factors) Passive entities owned by developers and landlords that do not actively use or occupy the assets acquired or improved with loan proceeds Businesses located in a foreign country Private clubs and businesses which limit the number of memberships for reasons other than capacity Businesses principally engaged in teaching, instructing, counseling, or indoctrinating religion or religious beliefs, regardless of setting Businesses with associates who are incarcerated, on probation, on parole, or have been indicted on a felony Businesses or applicant involved in a business which defaulted on a Federal loan Refinance of existing SBA loans with new SBA loans (unless funding a Change of Ownership) SBA eligibility considerations SBA loan programs are not available for every lending situation. Here are some of the most common ineligible loan conditions:

12. An SBA guaranty doesn’t make a bad loan good… But… An SBA guaranty does enhance a good loan for the benefit of the borrower and bank when certain credit considerations need to be mitigated. The SBA eligibility maxim

13. SBA America’s Recovery Capital (ARC) Loans up to $35M 100% guaranty for all loans regardless of loan size Interest free to borrower with rate subsidized by SBA Used to make 6 months of payments on Qualified Small Business Loans No payments for 18 months, then P&I amortized over 5 years Available to viable small business showing positive cash flow in at least 1 of the last 2 years Business must show financial hardship (such as significant loss in sales, gross margin, working capital, customer base, employees or major suppliers) Approval by SBA in approximately 1-3 weeks SBA loan program overview

14. SBA loan program overview SBA Express Loans up to $350M 50% guaranty for all loans regardless of loan size Revolving Lines of Credit and Term Loans Lender approves eligibility Lender’s loan documents are used Lender can refinance its own, or other banks’, conventional loans up to program limit Immediate SBA Approval via Internet

15. SBA Community Express Loans up to $250M Lender approves with a Technical Assistance (“T/A”) requirement for borrower Technical Assistance paid for by Lender TA provided SCORE, SBDC, private provider, etc. Lender’s loan documents are used Revolving Lines of Credit & Term Loans Eligible clients: Any business is eligible for a loan up to $25,000 Otherwise, business must be located in a Low-to-Moderate Income Track or HubZONE 90% guaranty until approx.12/31/09 Lender can refinance its own, or other banks’, conventional loans up to program limit Immediate SBA Approval via Internet SBA loan program overview

16. SBA Patriot Express Loans up to $500M Eligible audience: active members of military reservists and national guard – also includes spouses and widows Lender’s loan documents are used Revolving Lines of Credit and Term Loans 90% guaranty until approx. 12/31/09 Lender can refinance its own, or other banks’, conventional loans up to program limit Immediate SBA approval via Internet SBA loan program overview

17. SBA Export Express Loans up to $250M Available to borrowers who have been in business at least 12 months Borrower must be entering or expanding an export market Lender’s loan documents are used Revolving Lines of Credit and Term Loans 90% guaranty until approx.12/31/09 Lender can refinance its own, or other banks’, conventional loans up to program limit Immediate SBA approval via Internet SBA loan program overview

18. Preferred Lender Program: PLP 7(a) Loans up to $2MM Term/Installment Loans only Lender underwrites and approves loan request under its Delegated Authority 90% guaranty for all loan sizes up to a maximum of $1,500M in guaranteed dollars until approx.12/31/09 Lender prohibited from refinancing its own conventional loans Lender allowed to refinance other banks’ conventional loans Interim conventional loans allowed up to 90 days with SBA “take-out” Immediate approval – Internet SBA loan program overview

19. General Program: Regular 7(a) Loans up to $2MM 90% guaranty for all loan sizes up to a maximum of $1,500M in guaranteed dollars (until approx. 12/31/09) Term / Installment Loans only When appropriate? Lender desires to term-out or refinance its own existing conventional loans To provide financing in business acquisition situations when Goodwill is the lesser of: 50% of the loan amount, or $250,000 Approval by SBA in approximately 1-3 weeks SBA loan program overview

20. SBA loan program overview Special 7(a) Loan Programs CAPLines Seasonal Line / Contract Line / Builders Line Loans up to $2MM w/ 85% max. SBA Gty Export Working Capital Loan (EWCP) Loans up to $2MM w/ 90% max. SBA Gty Term loans & Lines of Credit Entering/expanding export efforts; adversely affected by competition from imports International Trade Loan Loans up to $2MM w/ 85% max. SBA Gty Term loans only Entering/expanding export efforts; adversely affected by competition from imports

21. SBA 504 is a Debenture Program Lender partners with a Certified Development Company (financial Intermediary) to provide long-term, fixed-asset acquisition and expansion financing Long-term, competitive fixed-rate on up to 40% of transaction Fixed Asset Purchases Only (i.e. real estate, equipment and related soft costs) Recommended for loan requests > $350M Permanent take-out financing for lender via sale of debenture in secondary-market 10- or 20-year fixed rate “set” at time debenture is sold SBA loan program overview

22. Additional SBA assistance Beyond Loan Programs Financial Assistance and Advocacy SCORE – volunteer organization providing business management counseling SBDC – provide business counseling and training Other Financial Assistance Providers Microloan Intermediaries – Non-profit; six located in Wisconsin Small Business Investment Companies – fills gap between Venture Capital and borrower needs that can’t be handled by “traditional” lending sources

23. Additional SBA Assistance Beyond Loan Programs Other Programs Surety Bond Program – bonding assistance for government and private contracting opportunities Small Business Training Network – business training Prime & Subcontracting Assistance Program – gov’t contracting HUBZone – job creation in urban & rural areas; including Procurement Assistance 8(a) Development Program – assistance for socially and economically disadvantaged individuals Small Business Innovation Research Program – funds critical startup and development stages for new technology and commercialization of said technology Small Business Technology Transfer Program – support for innovation and Research & Development Management and Technical Assistance – additional business management support

24. Additional SBA Assistance Disaster Recovery Loan Programs Physical Disaster Program For businesses, homeowners and renters to assist with replacement of real estate, equipment, fixtures, furniture, inventory, and leasehold improvements to pre-disaster condition Up to $1.5MM as approved by SBA Economic Injury Disaster Program For small businesses only that sustain economic injury as a direct result of a disaster event Up to $1.5MM as approved by SBA Military Reservist Economic Injury For small businesses that have essential employees and/or owners “called up” to active duty (Title 10 Activation); support working capital needs during deployment Up to $1.5MM as approved by SBA

25. Management Cash Flow Profitability Collateral Industry trends Credit Capital What’s the “real” scoop? What is the bank really looking at when you apply for a loan?

26. Where do you stand with the seven (7) items on previous slide? Find a bank that understands “small business” Build a relationship before you need a bank Talk with more than one bank Use resources available Before you go to the bank, prepare…

27. Helpful Internet Web sites: www.sba.gov www.score.org www.business.gov www.sba.gov/sbdc www.sba.gov/services www.franchiseregistry.com www.sba.gov/reservists www.sba.gov/VETS/ Resources

28. Questions? Information provided was deemed to be accurate as of May 6, 2009. Neither Associated Banc-Corp nor any of its affiliates give tax or legal advice. Please consult a financial, tax or legal professional for information specific to your situation. Loans subject to credit approval. Associated Bank, N.A. is a Member FDIC and Associated Banc-Corp. Equal Housing Lender. Equal Opportunity Lender.