About First State CLF

1. Small Business Lending at First State Community Loan Fund Vandell Hampton, Jr. President & CEO 100 West 10th, Suite 1005 Wilmington, DE 19801Ofc: 302-652-6774/Fax: 302-656-1272www.firststateloan.org

2. About First State CLF First State CLF is a not-for-profit Community Development Financial Institution (CDFI) that that was established in 1993 and specializes in supporting small businesses, microenterprises, and affordable housing. Our mission is to actively promote and provide creative opportunities for access to capital for small businesses, community organizations and developers of affordable housing throughout Delaware and Southeastern Pennsylvania.

3. Business Loan Programs Micro Loan Fund • Loans from $5,000 to $50,000 with terms up to 5 years • Interest rate – 8% - 8.5% • Fees • $100 Annual Fee • Closing costs (attorney fees if applicable) • All out-of-pocket expenses (title insurance, filing fees, appraisals, inspection fees, etc.) • Loan purposes include, but are not limited to equipment, inventory, and working capital Business Growth Fund • Lending Range – $50,000 to $250,000 with terms up to 5 years • Interest rate at 7.25 - 8.5% • Fees • 2% of loan amount • Closing costs (attorney fees if applicable) • All out-of-pocket expenses (title insurance, filing fees, appraisals, inspection fees, etc.) • Loan purposes include, but not limited to equipment, inventory, leasehold improvements, real estate, and working capital

4. Credit Enhancement Programs • U.S. Small Business Administration Community Advantage Program is a pilot initiative aimed at increasing the number of SBA 7(a) guaranteed lenders who reach underserved communities, targeting community-based, mission-focused financial institutions which were previously not able to offer SBA loans. Provides up to 80% Loan Guarantees. • Delaware Access Program is designed to give banks a flexible and extremely non-bureaucratic tool to make business loans that are somewhat riskier than a conventional bank loan. The program is based on a risk-pooling concept. When a lenders makes a loan under the Program, the borrower pays a one-time fee, which is matched by a lender fee. Those funds are matched by DEDO and deposited in a pool, which can be accessed if the loan defaults.

5. First State CLF 2012 Lending Activity

6. Types of Financing • Term Loan– an agreement by an lender to provide a lump sum of money at the beginning of the loan. The loan is paid back in equal amounts over the course of a number of years. • Working Capital – terms 3 – 5 years. • Machinery & Equipment – terms to 7 – 10 years. Loan terms will not exceed the life of the asset. • Real Estate – terms 20 – 25 years. Lenders will typically finance up to 75% - 80% of the value. • Line of Credit– an agreement in which a lender disburses funds as they are needed, up to a predetermined limit. The customer may borrow and repay repeatedly up the limit within the approved time frame. (usually one year) • Inventory • Account Receivables • Contract Financing • Short Term Loan– this loan is used for purposes such as financing seasonal buildup in accounts receivable or inventory. Lenders usually expect these loans to be repaid after their purposes have been served.

7. What Lenders Look For • Character – creditworthiness, personal history. • Repayment Ability – will the business revenues support the business expenses and the proposed loan? • Management – Are you capable of managing the business. • Collateral – is there sufficient collateral available to secure the loan in case of default? • Economic Conditions – What is the economic outlook for your business and industry? • Available Capital – Is the loan request large enough to cover any unexpected changes in the situation? If not, is there other capital available to the borrower? • Equity – Your ownership of business, usually in the form of money (cash) you have invested or assets you have pledged to the business.

8. Application Items • Business Plan. • Three years projected financial statements with assumptions. • Three years historical financial statements (if existing business). • Three years personal and business tax returns. • Proposed lease agreement or agreement of sale. • Estimates for proposed machinery or equipment. • Estimates for proposed renovations.

9. Questions