1. SBA 504 Loan Program Long Term Fixed Asset Financing For Small Businesses

2. Who are we? Private non-profit Certified Development Company created to assist small businesses with their long term credit needs and focused on economic development. Private non-profit Certified Development Company created to assist small businesses with their long term credit needs and focused on economic development. In operation since 1996 In operation since 1996 Outstanding portfolio - $262,865,000 Outstanding portfolio - $262,865,000 Average loan amount PTD- $845,680 Average loan amount PTD- $845,680 Average loan amount FYE ‘13- $995,000 Average loan amount FYE ‘13- $995,000 Average loan amount YTD ‘14- $1,214,000 Average loan amount YTD ‘14- $1,214,000

3. What have we done? # 1 SBA 504 Lender in New Jersey – 18 years Top 10 SBA Lender in New Jersey # 35 SBA 504 volume lender YTD (300 CDC’s) nationally Authorized $54,088,000 in FYE ’13 and $51,431,000 in FYE ’14

4. SBA 504 Loan Program Long Term, Below Market, Fixed Rates Long Term, Below Market, Fixed Rates  Real estate and equipment acquisition  Facility construction, expansion, renovation and leasehold improvements  Project soft costs Equity injection as low as 10% Equity injection as low as 10%

5. Eligible Businesses Eligible Businesses  For Profit Corporations, Partnerships or Proprietorships  Tangible Net worth < $15 million  Two year average after tax net income < $5 million Ineligible Businesses Ineligible Businesses  Nonprofit organizations  Investment companies, lending institutions, real estate investment companies

6. Financing Structure 50% - First Mortgage Lender 40% - CDC 504 Loan 10%* - Equity Injection  *15% Equity Injection for Special Purpose Property OR New Business  *20% if both

7. Maximum Loan Amount $5,000,000 – Regular 504 loan $5,000,000 – Regular 504 loan $5,500,000 – Loans to Manufacturers $5,500,000 – Loans to Manufacturers $5,500,000 – “Green” projects $5,500,000 – “Green” projects No Restriction on Total Project Size!!

8. Eligible Uses of Proceeds Purchase of land Purchase of land Purchase or construction of a building Purchase or construction of a building Modernization, renovation, restoration, including leasehold improvements Modernization, renovation, restoration, including leasehold improvements Purchase of machinery and equipment which has a minimum useful life of ten (10) years Purchase of machinery and equipment which has a minimum useful life of ten (10) years 10% contingency on construction projects 10% contingency on construction projects Related soft costs such as construction period interest, professional fees for accountants, engineers, appraisers, etc. Related soft costs such as construction period interest, professional fees for accountants, engineers, appraisers, etc.

9. Ineligible Uses of Proceeds Working Capital Working Capital Intangible Assets Intangible Assets Refinancing Refinancing Investment Real Estate Investment Real Estate

10. Employment Impact Employment Impact  One job per $65,000 of 504 money  One job per $100,000 to manufacturers  Borrower meets public policy goal (i.e. minority, WOB, veteran)  Property located in growth/enterprise zone Term Term  Real estate: 20 years (1 st mortgage: 10 years)  M&E: 10 years (1 st position financing: 7 years) Interest rate Interest rate  Spread over 5 & 10 year Treasuries  NO RESTRICTION on 1 st mortgage fees or rate

11. Security Security  Generally limited to 504 asset being financed  Third party lender has 1 st position (not pari passu) (not pari passu) Personal Guarantees Personal Guarantees  20% or more ownership

12. Construction Financing Construction Financing  Permanent take out financing  Bridge financing required until project complete Repayment Repayment  Commences first day of month following funding  504 loan self amortizing with level monthly payments

13. Fees Fees  2.65% of 504 loan and legal fee added to net 504 loan  As low as $2,500  Third party lender pays.5% to SBA on first mortgage

14. Prepayment Prepayment  20 Year Loan: Declining 10% over ten years  10 Year Loan: Declining 20% over five years  Prepayment amount generally less than prepayment on conventional loans Other Guidelines Other Guidelines  51% occupancy required; 60% for new construction  EPC ownership may be different than that of SBC – all controlling principals of each must guaranty

15. Advantages of a 504 Provides flexible client focused options Provides flexible client focused options Competitive pricing Competitive pricing Longer term financing than bank loan Longer term financing than bank loan Helps retain capital/ manage cash flow Helps retain capital/ manage cash flow Allows for greater underwriting flexibility –higher LTV’s Allows for greater underwriting flexibility –higher LTV’s Ability to include construction and M&E in one loan Ability to include construction and M&E in one loan Roll in “soft costs” (i.e. bridge fees, appraisal, environmental) Roll in “soft costs” (i.e. bridge fees, appraisal, environmental) Does not require additional collateral to be pledged Does not require additional collateral to be pledged

16. How to Proceed Project description and estimated project cost Project description and estimated project cost Operating company and principal’s prior two years tax returns Operating company and principal’s prior two years tax returns Interim financial statements Interim financial statements Current personal financial statement Current personal financial statement Call NJBFC Call NJBFC (201) 346-0300 (201) 346-0300 Or visit us at www.njbfc.com