Credit: The 3 Most Important “C’s”

hennesseycap.com

What Alternative Lenders Look For

Underwriting the critical 3 “C’s”

Character – who are you when times get tough?

Cash Flow

Collateral

Character

Your willingness to pay back your loanHow you have paid your bills in the past is an

indication of how you will pay your future debt obligations.

Key Factors for Hennessey CapitalOrdering Process You Customer’s credit worthiness

Character

Determine management’s reputation and experience in the industry and community.

Determine how past obligations have been handled.• Business credit

Cash Flow

Cash Flow = The amount of cash available from all sources of income in relationship to the total amount of personal and business debt.

Collateral

Primary source of repayment • Receivables (85%)• Inventory (50%)

Results

The stronger the company’s “3 C’s” are, the greater chance the company’s loan will be approved.

good character good collateral (receivables & inventory) good debtors good cash flow_______________________________________

= good chance for funding

++++

Summary

Character

Cash Flow

Collateral

Hennessey Capital Financing

A division of Hitachi Capital America Corp.; works with B2B companies in the manufacturing, service, and distribution s paces to provide working capital through factoring and asset- based lending

Provides up to $5 million and more for companies that are post-revenue (has sales) but pre-bankable (may not fit the mold for

a traditional bank loan)

Uses receivables & inventory as collateral

Financing Options Factoring

Business to business sales companies

Limited track record or rapid growth

Leverages up to 90% of invoices for immediate cash

Bridge the gap between service and collection/payment

Can be used in conjunction with current bank facility

EXAMPLE: $100 = $85 advance paid at time of invoice with balance due $15 less our fees paid when customer’s payment is received.

Financing Options Asset-Based Line of Credit

Established business to business sales companies.

Restructure current bank debt, successor financing to factoring or flexible tool for long term needs.

Leverage asset classes to maximize cash-accounts receivable, inventory, machinery and equipment or real estate.

A/R Inventory is used as collateral

Working With Banks Complementary Relationship

• Focused on debtor strength, not profitability • Past losses are acceptable [BK]• Less focus on personal net worth • Non-bankable entities are acceptable • We help businesses establish a track record and transition into a traditional banking relationship • We participate with banks to supplement your additional working capital needs or complement an existing bank line • The bank maintains the business banking account

Joe Romeo Senior Business Development Officer Hennessey Capital

Phone: 248.658.3224

jromeo@hennesseycap.com