Financing Solutions for Emerging Businesses

1
Financing SolutionsforEmerging Businesses

• January 15, 2008

2
Robert CarpenterBusiness Development Specialist
for Lender Relations
3
Ted LauerSVP, SBA Department Manager-Access
National Bank

• Managed SBA Lending Dept for 1 ranked SBA
• Lending Institution in SBAs WMADO (92 96)
  
• Co-founded National Association of Government
• Guaranteed Lenders (NAGGL) Region III Sub-
• Committee (1996)
• Served on Board of Directors for NAGGL (1995)
• Co-founded Access National Bank (1999)
• BA (Economics) MBA from Wake Forest
• University

4
IntroducingRobert Carpenter
5

• Unleashing
• the Productive Powers of
• SBAs
• Programs and Services
• for your Business

6
WWW.SBA.GOV/DC
7
MYTHS ABOUT SBA
Too much time! Too much paperwork! Three
decline letters! The lender of last
resort!
8
(No Transcript)
9
(No Transcript)
10
SBA Financing Program

• 7(m) Microloan Program
• Disaster Loan Program
• Small Business Investment Company Program (SBIC
  Venture Capital)
• 7(a) Loan Guaranty Program
• Community Express
• SBA Express
• Capline Lines of Credit
• Preferred Lenders Program
• International Trade
• 504 Fixed Asset Loan Program
• Surety Bonds

11
SBA Financing Program
WASHINGTON METROPOLITAN AREA DISTRICT OFFICE
LOANS IN NUMBERS FROM FY
1994 TO FY 2008
Loans
12
SBA Financing Program
WASHINGTON METROPOLITAN AREA DISTRICT OFFICE
LOANS IN DOLLARS FROM FY
1994 TO FY 2008
DOLLARS
13
(No Transcript)
14
(No Transcript)
15
(No Transcript)
16
(No Transcript)
17
Questions

• Robert Carpenter
• Small Business Administration
• Washington, DC District Office740 15th Street NW
• Suite 300Washington, D.C. 20005
• Phone [phone]
• Robert.carpenter_at_sba.gov

18
IntroducingTed Lauer
19
About Access National Bank

• Opened in 1999
• Publicly listed in July 04 NASDAQ ANCX
• SBA Preferred Lender Status as of July 2006
• Consistent top 5 rankings in SBA loan volume
  (504/7a)
• Locations in Reston (HQ), Tysons, Chantilly,
  Leesburg and now Manassas
• Coming soon to Fredericksburg (2008).

Publicly Traded Community Banks with assets up
to 1 billion. Ranking based on a 3-year Average
Return-on-Equity
20
Why Get an SBA Loan?

• Longer term (smaller payments), No balloons
• Smaller down-payment conserves cash
• Loan approvals not otherwise available
• Streamlined application forms process

21
Notable SBA borrowers.

• FedEx
• Mrs. Fields Cookies
• Nike
• AOL
• Allen Edmonds Shoes
• Calloway Golf
• Totinos Pizza

• Staples
• Outback Steakhouse
• Winnebago
• Gymboree
• Sun Microsystems
• Jenny Craig
• UnderArmour

22
Access National BanksUnderwriting Criteria

• Cash flow
• Demonstrated or Projected
• Management
• Expertise Character
• Equity in Business Project
• Debts vs. Equity
• Sufficient Collateral

23
Eligibility for 7(a) Program
CRITERIA

• For-Profit
• Affiliation
• Personal resources
• Credit elsewhere
• Franchise Agreements

• Meet Size standards
• Business Types
• Use of proceeds
• Citizenship

• Remember the tenants of eligibility
• Business Owner must be eligible
• Business must be eligible
• Project must be eligible

24
Loan Uses

• Working Capital (short or long term)
• Business Acquisition / Buy a Franchise
• Refinance Consolidate Debt
• Equipment Purchase
• Real Estate (owner occupied)
• Research Development

25
Permanent Working Capital Loans

• Long Term Financing for Current Asset Growth
• Serves as a Substitute for Equity Capital
• Start-ups Franchises (www.franchiseregistry.com
  )
• Finance Acquisition of Existing Business
• Typical Maturity is 7-10 years

26
SBA Express Loans

• Loan limit up to 350,000
• Streamlined application paperwork
• Allows hybrid borrowing for short term or long
  term working capital.
• Start as revolving line can be termed out
• Up to 7 years term

27
Business Acquisition Loans

• Must Acquire 100 of Business
• Stock or Asset Transfer
• Experience/Training Essential
• Purchase Contract Should Itemize Values for Each
  Asset Being Purchased
• 20 Down Payment is Typical
• Subordinated Seller Financing is OK
• Valuation of Business to Support Contract Price

28
Refinancing / Consolidating Debt

• 20 or More Loan Payment Reduction
• Eligible Debt
• Revolving Lines
• Credit Card Debts
• Balloon Notes
• Demand Notes
• Cannot Refinance Shareholder Debt
• Business Debt Only

29
EXPORT WORKING CAPITAL

• Loan limit 1.5 Million
• 12 month maturity 2 renewals permitted
• For single transactions
• or multiple sales on revolving basis
• Foreign receivables or Standby Letters of Credit.

30
Patriot Express

• 75-85 Guaranty
• Potentially Reduced Restrictions on Collateral
  Requirements
• Loans up to 500,000
• Available to
• All US Veterans
• Spouses and Widows/Widowers of US Veterans
• Access National Bank is among the first Community
  Lenders approved Nationwide!

31
BASIC STRUCTURE - 504 LOANfor Owner Occupied
Real Estate /or Equipment
32
SBDC Programs and Services

• One-on-one confidential business counseling
• Small group training seminars
• Conferences, workshops, seminar series
• Resource referral to local, state, federal and
  private sources

33
Access To Capital

• Information on debt and equity
• resources
• Assistance in preparing financing
• packages
• Guidance in selecting and
• approaching funding sources

34
Business Plan Development

• A business plan is a basic tool for
• business owners
• SBDCs provide guidance and input during
• the business plan development process
• 1-on-1 consulting and small group training

35
Start-Up Assistance

• Business Plans
• Marketing
• Financing
• Licensing Registration

36
Meet all of your financial needs with Access
National Bank

• You dont have to leave your office to receive
• the benefits of
• SBA Lending
• Personal Attention Responsiveness
• Online Business Banking
• Online Bill Pay
• Online Check Images
• Real Time Transactions
• Courier Pick Up
• and introducing e-Deposit!!

37
Questions

• Ted Lauer
• Access National Bank
• 300 Fort Evans Road, NE
• Suite 103
• Leesburg, VA 20176
• Phone [phone]
• TLauer_at_AccessNationalBank.com

38
CaseBusiness Acquisition

• Software developer selling primarily to U.S. Govt
  has 3 Million Revenue 300,000 EBITDA
• Competitor For Sale with 2 Million Revenue
  200,000 EBITDA
• Price is 2 Million
• Payable 1.25 Million at Closing
• Seller Take-Back Note of 750,000
• Payable 8 Interest-Only for 5 Years
• Projected Combined EBITDA for the Two Companies
  is 600,000.
• Combined Balance Sheet
• Accounts Receivable 1,000,000
• Accounts Payable 400,000
• LOC Balance 200,000
• PP E 200,000
• Cash 400,000

39
Financing SolutionsforEmerging Businesses

• Thank you for joining us