Capital Access Corporation Kentucky

1. Capital Access Corporation Kentucky SBA 504 Loan Program

2. 504 Loan Program Fixed Interest Rates 10 or 20 year term 10% Borrower equity US Small Business Administration

3. Purpose of 504 Program • Assist healthy & growing small businesses by participating with lending institutions to provide fixed-rate, long-term financing of fixed assets. • To provide long term fixed-asset financing to eligible and healthy small businesses at a reasonable rate.

4. Accessing the SBA 504 Loan Program • Capital Access Corporation – Kentucky will provide access to the SBA 504 Loan Program. • Our geographic territory consists of; Statewide

5. Eligible Businesses • Project located in our territory • Business must be for profit • Business net worth less than $7 million • Average income for the last two years cannot exceed $2.5 million • Initial owner occupancy standard: 51% for existing building, 67% for new construction

6. Eligible Projects Fixed assets such as • Land and new building construction • Existing building purchase • Building renovation • Machinery and Equipment

7. Project (Amount) CAC – Ky. (Amount) MinimumMaximum $120,000 Unlimited $50,000 $1,500,000* *If a policy goal of SBA is met, CAC – Ky. Loan can be $2,000,000 Project Size

8. SBA Public Policy Goals • Rural Development • Business District Revitalization • Expansion of Exports • Minority Business Development • Woman Owned Business (51%) • Veteran Owned Business (51%)

9. Fixed Asset Lender (7 or 10 year minimum term) CAC – Ky. (10 or 20 year fixed rate) Borrower Total Project $1,000,000 50% $500,000 40% $400,000 10% $100,000 100% $1,000,000 Typical 504 Project

10. Lender Loan • If CAC – Ky.’s loan is 20 years, the bank loan must be at least a 10 year term. Real Estate Loans. • If CAC – Ky.’s loan is 10 years, the bank loan must be at least a 7 year term. Equipment Loans. • Rate negotiation are between bank and customer. • Balloon payments are allowed

11. Advantages to Lending Institution • 1st Mortgage on property financed • 50% loan to value • Improved cash flow • CRA Credit • Capital Access Corp – Ky. Works directly with the client

12. Advantages to Borrower • Conserve working capital – 10% down payment • Offset interest rate risk – 40% of project tied to fixed rate • Extended amortization provides lower monthly payment • Improved collateral position for bank often results in more lending capacity for other needs and lower rates

13. Rates • Established at the time of the bond sale, after the project is complete • Typically lower than conventional • Fixed for the life of the loan!

14. Predefined Prepayment Penalty • Effective for first half of the loan • For a 20 year note, starts at the note rate in the first year and decreases 10% a year for 10 years • For a 10 year note, starts at the note rate in the first year and decreases 20% a year for 5 years • Company incurs no penalty if prepays loan in: - year 11 of a 20 year bond - year 6 of a 10 year bond

15. Additional Program Specifics • Personal resource test implemented • Single purpose facilities required additional 5% equity injection • Start-up businesses require an additional 5% equity injection • Job Creation standard of 1 job created for every $50,000 Capital Access Corp – Ky. Lends must be met

16. For More Information Call: Capital Access Corporation-Kentucky 120 Webster Street, Suite 330 Louisville, Ky. 40206 (502) 584-2175