2013 ANNUAL REPORT

Board President and Executive Letters.............................................................................3

2013 Economic Impact...................................................................................................5

Ice House Entrepreneurship Program.............................................................................6

Commercial Real Estate & Capital Equipment Loans [SBA 504].......................................8

General Small Business Loans [SBA 7(a)].......................................................................14

Colorado Main Street Loans........................................................................................18

Our mission is to foster the economic growth of diverse small businesses within our communities.

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Dear Colorado Lending Source Members, Friends and Supporters:

This past year, Colorado Lending Source celebrated its 23rd year in operation. From the fledgling organization of two people in early 2001 to 2013, Colorado Lending Source has grown to over a $500 million organization, the 7th most active Certified Development Corporation in the country and a staff over 40. Coming off the heels of a national economic recession, Colorado Lending Source saw 2013 return to levels similar to 2005 (pre –recession). With over one hundred and eighty two new 504 loans approved, growth in 7(a) packaging for partner lenders and Colorado Main Street Loans gaining ground in rural areas of Colorado, Colorado Lending Source had over $250,000,000 allocated in total project cost. This resulted in close to 2,000 jobs created and retained for Colorado’s economy. If you recall, Colorado Lending Source’s mission is to “foster economic growth of diverse small businesses within our communities”. Looking at the previously mentioned statistics, I would say they are hitting their mission dead on.

2013 not only saw Colorado Lending Source grow in staff, loans and age, but also in space. This year, Colorado Lending Source acquired a new building for the future headquarters of the organization. The new space, located at 1441 Blake Street is close to many amenities and new developments, Union Station being a prime example. This new location will be able to meet the needs of the growing origination and be able to house more programs, such as the Ice House Entrepreneurship classes, additional space for growing Colorado Main Street Loans programs and the launch of Colorado Lending Source’s proprietary

loan software, E-Credit Memo. The constant activity and continuous foresight to grow this organization will help diversify and create a self-sustainable Certified Development Company (CDC) that will be a prime example for CDC’s around the country. We are lucky to have such a strong origination in Colorado helping small business owners achieve their dreams, helping to create jobs in our economy, and retaining a workforce that helps stimulate overall economic growth. We could not do this without the support of over 60 different financial institutions and over 160 different loan officers. For this partnership, we thank you.

To the Colorado Lending Source staff and the Executive Director, the Board of Directors thanks you for your tireless work, enthusiasm and passion for fostering growth, ideas and creativity in our State. We thank you for your dedication to the mission. And finally, to the entire membership, Board of Directors and Colorado Lending Source organization, I personally thank you for a wonderful year. Yes, challenges were had, but with any growing organization, there will be some challenges. It is from these challenges we seek opportunity to rise above, become stronger, more dedicated and refined. It has been an honor and delight to serve as your President and I thank you for all your support.

Respectfully,

Doris J. Rigoni

Board President Letter

Board of Directors

Executive CommitteeBoard PresidentDoris RigoniMile High Banks

Board Vice PresidentDave OttesonBBVA Compass Bank

Board TreasurerBryan BlakelyAccelerate Colorado

Board MembersCorri SpiegelCity of Centennial

Frank GrayCastle Rock Economic Development Corporation

Jenae AndersonVectra Bank

Jessica EricksonColorado Office of Economic Development and International Trade

Michael PaulEnvisage Financial, Edward Jones

Nancy SheridanJ.P. Morgan Chase

Niall MooneyCommerce Bank, N.A.

Stacy JohnsonTown of Windsor

Tim KraichThe Farmers State Bank

Honorary MemberRudy Bianchi

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Dear Colorado Lending Source Members,

This year just past, 2013, was one of the more challenging years for Colorado Lending Source as we started down the trail to-wards the image of what our organization might look like in 2021, as embodied in our strategic plan and personified by the Board’s vision for Colorado Lending Source.

Our mission of fostering the economic growth of diverse small businesses within our communities remains uppermost in every-thing we do. Part of my focus too, as the executive director, is to build both depth and breadth within the organization in prepa-ration for all that is to come. And it will be an exciting journey. A lot happened in 2013. A lot more will happen in 2014.

We started 2013 by launching the first of three ten-week Ice House Entrepreneurship Program workshops we conducted with a total of 31 participants during the year. The Ice House class is a Kaufman Foundation supported educational course intended to provide participants with a framework for understanding and implementing an entrepreneurial mindset. The entrepreneurial environment in Colorado is arguably one of the most exciting in the nation and the Ice House class is our effort to build and expand on that culture and climate.

We were also chosen by the Small Business Administration (SBA) to be one of the five national test sites for an extensive and rigorous new audit of certified development companies. In an environment where more regulation is becoming the norm for lenders of all shapes and sizes, the SBA now requires certified development companies like Colorado Lending Source to act more like community banks in many operational aspects. Their new audit process is the mechanism by which the SBA has chosen to deliver this new era of regulatory oversight and the message from the SBA, loud and clear, was that we should act more like a community bank in servicing and liquidating SBA 504 loans. We took this to heart by quickly adding three new staff to our servicing and priority asset teams, while simultaneously beefing-up our internal risk rating system so that it is now comparable to any that a community bank might operate.

On a statewide level, Colorado continued to emerge from the final throes of the great recession, becoming the twelfth state

to return to pre-recession employment levels – Colorado hit a peak of 1.440 million employees in 2005 but it wasn’t until 2013 that we finally matched and exceeded this mark, hitting 1.463 million employees during the year.

This was also evident in the work Colorado Lending Source did in 2013. We worked with approximately the same number of business borrowers this year as last, assisting 276 small businesses with their expansion projects in 2013, but these businesses cre-ated or retained 40% more jobs than they did the previous year, helping to lead the employment recovery numbers in Colorado.

Those 276 small businesses secured 184 SBA 504 loans, 87 SBA 7(a) loans and 5 Colorado Main Street loans, adding or retain-ing 2,794 jobs, an average of 10.1 per project (up from 7.2 jobs per project in 2012). The resultant economic impact was $356.2 million. Of course, we couldn’t have done any of this without our part-nership with the 55 different lenders and the 170 different loan officers we worked with during 2013. Thank you, everyone!

The staff of Colorado Lending Source is the most remarkable group of people you could ever assemble too, and they do a su-perb job helping the organization achieve its mission and help build jobs in Colorado.

Thank you too to the entire membership and the board for their support of Colorado Lending Source in 2013 as well. The orga-nization would not exist with you.

Thank you for a great 2013! Let’s see what 2014 will bring!!

Respectfully,

Mike O’Donnell

Executive Letter

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In 2013 Colorado Lending Source approved 276 small business loans. These loans helped to create and retain 2,794 jobs and injected a total of $356,168,517 into the economy. We partnered with 170 loan officers and 55 lending institutions to approve these loans. As a result, Colorado Lending Source finished the year as the 7TH most active lender of our kind in the nation, and number 1 in the state of Colorado.

Economic Impact

Loan Programs

Loans Approved

Jobs Created & Retained

Total Project Cost

SBA 504 Loans 184 1,630 $299,649,205.04

SBA 7(a) Loans 87 1,141 $56,010,750.83

Colorado Main Street Loans 5 23 $508,562.00

Total All Programs 276 2,794 $356,168,517.87

2013

Adams Bank & TrustAlpine BankAmFirst Bank, N.A.ANB Bank Bank of America, N.A.Bank of ColoradoBank of the WestBBVA Compass BankCapital West BankCentennial BankCentral Bank & TrustCitywide BanksCollegiate Peaks BankColorado Business BankCommerce Bank

Community Banks of ColoradoCoreFirst Bank & TrustFirst Citizens BankFirst Colorado National BankFirst Commercial Bank Colo-radoFirst National BankFirst National Bank of DurangoFirst National Bank of the RockiesFirst Southwest BanwkFirst State Bank of ColoradoFirstBankFlatIrons BankFMS Bank

Frontier BankGreat Western BankGuaranty Bank and Trust CompanyHigh Country BankHigh Plains National BankHome State BankIntegrity Bank & TrustInternational BankJPMorgan Chase Bank, NAKeyBank, National AssociationMountain View Bank of Com-merceNew West BankNorth Valley Bank

Northstar Bank ColoradoPeoples National BankPublic Service Credit UnionRock Canyon BankSolera National BankSteele Street Bank & TrustUMB Bank Colorado, N.A.US Bank, N.A.Valley Bank & TrustVectra BankVerus Bank of CommerceWells Fargo Bank, National AssociationWindsor State BankYampa Valley Bank

PARTNER LENDING INSTITUTIONS

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INDUSTRIESColorado Lending Source approved loans in 15 different industries in 2013. Within these industries, loans to Full Service Restaurants (20 loans), Breweries (11 loans) and Hotels/Motels (11 loans) were most common. Some of the more unique businesses we assisted with financing included: a commercial bakery, a distillery, a sawmill, a golf course and country club, and a sound recording studio.

ICE HOUSEEntrepreneurship Program→

2013 Loan Approvals by Industry

SBA 7(a) loans SBA 504 loans Colorado Main Street Loans

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Our lending reached 33 counties in 2013 (28 Colorado counties, 3 Utah counties, and 2 Wyoming counties).

30 or more loans 15 to 30 loans 3 to 14 loans 1 or 2 loans

Colorado Lending Source launched a new form of entrepreneurial education in Colorado in 2013. Hosting its first three sessions of the Ice House Entrepreneurship Program, which is a ten-week learning initiative developed in partnership with the Ewing Marion Kauffman Foundation, the Entrepreneurial Learning Initiative, and Pulitzer Prize nominee Clifton Taulbert. This two-part learning initiative designed to help participants think like entrepreneurs reached 31 participants looking to adopt an entrepreneurial mindset. We are offering this program in both Denver and Colorado Springs in 2014.

COUNTIES

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The Small Business Administration 504 loan program provides small business owners with financing to buy, build and renovate commercial real estate and purchase machinery or equipment. These loans can range from $25,000 to $5.5 million and are tied to a 20-year, Fixed Interest Rate. Colorado Lending Source partners with banks to provide these loans. We approved a total of 184 SBA 504 loans in 2013. These loans helped to create and retain 1,630 jobs and contributed $299,649,205 to the economy.

Commercial Real Estate & Capital Equipment Loans

504

Alex Dempster, CHFABart Writer, Wealth ConceptsBlake Davis, FirstBankCharlie Cartwright, Mid West Capital BankDan O’Meara, TD AmeritradeDarrell Berger, Fort Morgan State BankDave Lemmon, Mountain View Bank of CommerceDawn Davis, FirstBankJenny Stollar, Region 9 Economic Development DistrictKevin Armitage, Colorado Business BankLorna Reeves, Chache Bank & Trust

Marcus Notheisen, Castle Rock Economic Development CouncilMatthew Brunkow, Commerce BankRandi Lowenthal, Roaring Fork Business Resource CenterRon Harlow, Harlow CapitalRyan Stachelski, Arvada Economic Development CouncilSuzan Kozojed, Capital Source BankSuzanne Bastin, Guaranty BankTodd Guymon, Verus Bank of CommerceVic Calonder, Colorado Business BankYolanda Russell, UMB Bank

LOAN REVIEW COMMITTEE

SBA 504 Loan Approvals by Economic Development Objective

Community or Area

Development

Business District Revitalization

EnhancedEconomic

Competition

Expansion of Export

MinorityOwnedBusiness

RuralDevelopment

Veteran Owned Business

Women Owned Business

0

10

20

30

40

50

60

70

SBA 504 Refinance with ExpansionSBA 504 loans PCLP

One may say entrepreneurs seize opportunities, and turn problems into

solutions. That is what Clay Smith, owner and operator of Eastern Colorado Seeds (ECS), did when he transformed the agriculture industry in eastern Colorado. ECS provides high quality seed products and value added services to farmers and livestock producers. Now over a $10 million business, Clay attributes success to providing the latest technology and information using quality customer service. As an industry leader in over eight states, ECS selects a diverse product portfolio based on persistence, drought tolerance, High Yielding and High Quality characteristics. Clay has locations in Colorado and New Mexico, and his entrepreneurial voice resonates

when he states, “Guided by the philosophy of expositional quality and good service, ECS’ professional sales staff will continue to set the standard in the Seed industry.”

Without funding from Colorado Lending Source through the Small Business Administration 504 loan program, much of the small grain

seed production would still be produced in the Pacific Northwest. ECS is able to save approximately 20% of earnings at the newly acquired 17,000 square foot

facility and 11 acres of land, because the space allows for inventory storage, seed conditioning equipment and production. With the money saved, Clay will diversify products and services looking to additional markets within and outside the U.S.

FINANCING DETAILS

Commercial Real Estate Construction & Equipment

Purchase [504]

$1.4MM

PARTNER LENDER

CHFA

JOBS CREATED

5

EASTERN COLORADO SEEDS

9

FINANCING DETAILS

Commercial Real Estate Renovation & Equipment

Purchase [504]

$4.2MM

PARTNER LENDER

KeyBank

JOBS CREATED

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DRY DOCK BREWING COMPANY

With experience in the homebrew market, Michelle Reding and Kevin DeLange opened their first brewery in 2005, called Dry Dock Brewing

Company. Less than a year later they won their first gold award at the 2006 World Beer Cup® and since 2008, have won more medals at The Great American Beer Festival® than any other Colorado-based brewery. The quick national and international recognition contributed to their popularity and expansions in 2006, 2009, 2011, and 2013. Now Dry Dock distributes products to over 300 liquor stores and

500 bars and restaurants across Colorado. But before tapping into other markets, Kevin and Michelle prioritize satisfying the demand of Colorado beer-lovers first.

Having a brew-for-fun philosophy, Michelle and Kevin used a Small Business Administration 504 loan to buy a 30,000 square foot facility allowing them to expand their canning line and inventory, and purchase additional brewing equipment. Thanks to the financing provided by Colorado Lending Source, brewing is on the upswing in 2014!

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JUNIPER BOOKS

FINANCING DETAILS

Commercial Real Estate Purchase [504]

$710K

PARTNER LENDER

JPMorgan Chase Bank

JOBS CREATED

3

There are limitless possibilities of decorating a library when using Juniper Books. With

innovative and classic designs, owner and operator, Thatcher Wine, reinvents the wheel when it comes to the bookshelf. Thatcher has over twelve years of experience with online book selling and introduced custom book jackets to the market in 2010. Thatcher’s niche evolved from a request from an interior designer to put a book collection together. Since then, Juniper Books has attracted hundreds of other designers, architects, visual merchandisers, and private clients from around the world.

Working out of his basement for the first six years, then renting a small warehouse for six more years, Thatcher reached the point where additional space was needed to keep

up with high customer demand. Using the financing from a Small Business Administration 504 loan provided by Colorado Lending Source, Thatcher

purchased a storefront and warehouse in Boulder, Colorado. As a result, Thatcher increased in-house inventory and has the ability to create larger and more elaborate book collections.

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Vertical Arts Architecture is where mountain-rustic meets modern-chic. With Steamboat Springs, Colorado, as its home setting, this architectural design firm is world-renowned for alpine-inspired

mountain estates, commercial developments and equestrian properties. Brandt Vanderbosch founded the company in 2004 with a vision to pioneer design quality, innovation, and sustainability. Brandt has a talented team and strong local support cultivating Vertical Arts into a diverse company with in-house specialists in architectural design, interior design, landscape design and land planning. They have also broadened the firm’s scope of work to include Stēl House + Home, a custom interiors and furnishings storefront.

Colorado Lending Source helped Vertical Arts reduce interest rates on a commercial real estate loan through the Small Business Administration’s temporary 504 Refinance loan program. With lower monthly loan payments, Vertical Arts uses the extra cash to further expand and diversify services.

VERTICAL ARTS ARCHITECTURE

FINANCING DETAILS

Commercial Real Estate Purchase & Refinance [504

Refinance]

$820K

PARTNER LENDER

Centennial Bank

JOBS CREATED

2

12

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www.coloradolendingsource.org

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The Small Business Administration 7(a) loan program allows small business owners to finance a variety of needs including, start-up costs, working capital, business expansion and debt refinance. These loans are available directly from banks and range from $25,000 to $5 million. Colorado Lending Source offers lender assistance to banks providing these loans. We provided assistance to 20 lending institutions on the approval of 87 SBA 7(a) loans in 2013. These loans helped to create and retain 1,141 jobs and totaled $56,101,750 in small business financing.

General Small Business Loans

7(a)

*There are currently five types of 7(a) loans offered: Standard, Preferred Lender Program, Small Loan Advantage, CAPLines and Express.

SBA 7(a) Loans: Type & Number Approved by Lending Partner

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Established in 1995, Dalmatian Fire Equipment, Inc. is North America’s

largest supplier for refurbished Self Contained Breathing Apparatus (SCBA). Combining their diverse business backgrounds, CEO Kevin Simmons and President Russ Kates acquired the business in 2007. Operating out of two large warehouses in Eaton, Colorado, the company cleans, refurbishes and recalibrates used Self Contained Breathing Apparatus for resale applying the most advanced technologies and safety measures. Volunteer Fire Departments no longer have to sweat budget constraints to purchase equipment, because Dalmatian Fire Equipment creates a reliable and safe product that would otherwise be unaffordable. Additional markets include oil field, safety, marine, hazmat applications, mining and other industrial uses.

Thanks to Colorado Lending Source and Capital West Bank, Kevin and Russ obtained funding from a Small Business Administration 7(a) loan. The capital was used to buy out shareholders and to finance corporate restructuring.

DALMATIAN FIRE EQUIPMENT

FINANCING DETAILS

Business Acquisition [7(a)]

$690K

PARTNER LENDER

Capital West Bank

JOBS CREATED

3

15

Experienced brewers Michael Memsic, Chris Coyne, and Zach Nichols have fulfilled a lifelong dream of opening Boulder’s Sanitas Brewing Company. Through vision and dedication, the gentlemen produce a variety of different offerings committed to local and organic ingredients. Situated in a timeless Tap Room

and brewhouse, Sanitas has already garnered a strong following behind their inspiring beers. With cans of Black IPA and Saison available throughout Boulder County and a Tap Room bustling with thirsty locals, Michael, Chris, and Zach have built an unforgettable brand that Boulderites can’t seem to resist.

With the assistance of Colorado Lending Source and Flatirons Bank, the gentlemen secured a Small Business Administration 7(a) loan to fund general start-up costs. This includes the renovation of a taproom, working capital, hiring costs, in addition to brewing and canning equipment for in-house and wholesale distribution.

SANITAS BREWING COMPANY

FINANCING DETAILS

Commercial Real Estate Construction, Equipment

Purchase & Working Capital [7(a)]

$950K

PARTNER LENDER

Flatirons Bank

JOBS CREATED

4

16

17

www.coloradolendingsource.org

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DIRECT LOANSColorado Main Street Loans

The Colorado Main Street Loans program is a direct loan from Colorado Lending Source. These loans are intended to provide small business owners with financing options not available through conventional lenders for working capital, land and building purchases and construction, business acquisitions, debt refinance, inventory and furniture, fixtures and equipment. There are two options available under this loan program: a state-wide loan ranging from $50,000 to $200,000 and a rural loan available to businesses in Northeastern Colorado that ranges from $10,000 to $35,000. 2013 was the 3rd year we offered the Colorado Main Street Loans program. We approved 5 loans (3 Statewide and 2 Rural) under this program resulting in the creation and retention of 23 jobs at a total project cost of $508,562. 2013 also marked the first time we had one of these loans prepay, adding that money back to the revolving loan fund.

Alan Ramirez, Colorado Enterprise FundBill Unrein, Vectra BankDerek Hemmer, Colorado State Bank & TrustErin Beckstein, Adams County Economic DevelopmentJustin Vause, ACCION

Linda Olsen, Morgan Community CollegeRon Munyan, The Eastern Colorado BankShawna Markiewicz, University of Colorado Colorado SpringsStan Wood, ProLogic Capital

LOAN REVIEW COMMITTEE

Colorado Main Street LoansFrom inception in 2011 through 2013

-2 0 2 4 6 8 10 12 14 16 18 20

2013

2012

2011

Approvals Fundings PrePayments

Leland and Carolyn Oxley, owners of Motherlode Provisions, LLC, are breeding a new generation of Rocky-Mountain style barbe-cue sauces, hot sauces, steak sauce, and Bloody Mary mix. Their

all-natural, gluten-free, and sometimes vegan products reflect the whole-some beauty of Colorado’s Rocky Mountains.

Whether one calls it luck, Karma, or just good business, Colorado-based enterprises still emerge in the face of natural disasters. After the Four Mile Canyon Fire devastated homes and wildlife outside of Boulder, Colorado, Leland and Carolyn Oxley introduced their Rocky Mountain Style Barbecue Sauce at a benefit for the victims. The first of seven products to gain popularity, the sauce’s success prompted the Oxleys to move production from their small home to a bottling facility; they later opened a storefront in Breckenridge, Colorado.

The success of Motherlode Provisions is attributed to capital provided by Colorado Lending Source’s State-Wide Colorado Main Street Loans program. With the direct financing, the Oxleys purchased materials for bottling, marketing, and office equipment. Now spanning over 20 states across the U.S. and in Canada, the Oxleys lick their lips in anticipation of continued growth and new product lines.

FINANCING DETAILS

Working Capital [Colorado Main Street Loans]

$60K

JOBS CREATED

2

MOTHERLODE PROVISIONS

19

www.coloradolendingsource.org