CH Capital Partners, LLC

Loan Process

How do we communicate with clients, banks, FMPP

Most of the time, community bank were never suppose to handle clients with multiple entities. Big banks who were used to multiple entities with MBAs usually unwritten loans through systems like Moodys, S&P Financial Models, or CRE Calculators by Mortgage Banking Association After the great near depression of 2008 and 2009, many wealthy borrowers are now looking for loans, however community banks are not geared to take on the clients. FDIC is encouraging community banks to lend to clients and borrowers with better credit profile, but due to the regulatory environment, level of the underwriting team, and lack of capital (for labor and lending both) community banks are in a near death situation.

Current Environment
How many financial institution does it take for SBA 504 loan to get done? How do we communicate to one another, when we are using different technology, with different experienced people, different sets of ego, and different way of communicating? Currently everyone uses emails to communicate, but the problems are humans were never suppose to calculate that much information, but now with mobile phones, twitter, Facebook, Email, and other instruments to communicate, rather then working faster with collaborations, we are working longer trying to figure out what each other is saying. That is the reason why borrowers, clients never want to do a SBA 504 loan. The reason why banks do not want to do the SBA 504 FMPL loan is because of confusion. Confusion in the program, but further because of labor cost. To educate the new underwriters to collaborate with various different underwriting systems and being able to communicate the

Misconceptions
Most banks have had experience with CDCs who used the PCLP license to do the loan. (like PLP and CLP way to lend capital) Each has its own function. The new SBA 504 FMPP program does not allow PCLP, so with that each CDC has to give the files to SBA, get an approval, and need to review the financial decision of the CDC. There is no standard, standard in the loan. Since SBA 504 loan is a first lien (bank), CDC (SBA) Second Lien, each bank or financial institution decides what their credit appetite. So even-though CH Capital will assist in purchasing the loan for Merrill, Morgan, CS, and rest of the, the problem comes down to communication. How can we communicate remotely when there is no system in place for us communicate, collaborate and come to an agreement with one another.

TABLE OF CONTENTS
Stage 1
Prequalification Documents Needed Issue LOI Bank Requirements Fee Agreement Creating CRM Contact Pre Qualify Creating Client Email in SharePoint

Page 3
Page 4 Page 5-9 Page 10 Page 11 Page 12 Page 13-14

Stage 2

STAGE 3 Loan Approval STAGE 4 Loan Closing STAGE 5 LOAN FUNDING

Page 15 Page 16 Page 17

STAGE 1
Meet with Client Collect Prequalification Documents BDO Prescreen / Preflight Issue LOI Signed Fee Agreement Create contact in CRM

PREQUALIFICATION DOCUMENTS NEEDED

Stage 1 - Loan Application A01 - CDC Application A03 - CDC Credit Memorandum A04 - Eligibility Questionnaire A06 - Statement of Personal History A08 - Personal Financial Statement A09 - Personal Federal Income Tax Return (3 years) A11 - History of Business A18 - Projections - 12 Month Income & Expense A23 - Purchase Agreement-Escrow Instruction-Letter to Escrow A30 - Personal Credit Report & Explanations Bank Analysis Bank Balances Bank Credit Memorandum & Amendments Business Debt Schedule to Reconcile w Interim Financial Statement Business Development Breakdown Business Financial Statement Business Plan Business Year-End Financial Statements Certificate of Good Standing CIP Compensation Agreement Construction Cost Breakdown Current Proposed Lease Drivers License Copies Fee Disclosure-Borrowers Signature Cert Interim Financial Statements New Business Contract Possibilities Ownership Structure MOD Photo Preliminary Title Report Projections (Annual) Resume Tax Lien Release Tax Return Explanation Non affiliated business tax returns

ALL docs should be filed in the stage 1-5 folders

ISSUE LOI BANK REQUIREMENTS

SBA 504 and 7a
Hanmi Bank (Page 5) - SBA 504 & 7a Zion Bank (Page 6 & 7) SBA 504 CDC Direct (Page 8) SBA 504

HANMI BANK LOI REQUIREMENTS

Preflight with executive summary and 5 key bullet points Three year tax return on subject Three year tax return on personal and any other entities Payment history for two years Purpose of loan Business debt schedule Personal debt schedule Collateral description Brief summary about subject transaction and borrower/guarantor history. Any issues or risk to the Bank

ZION BANK LOI REQUIREMENTS

Loan Package for Owner Occupied Properties
For all individuals who hold 20% or greater ownership in the holding company/operating company: ___ 1- Personal tax returns for the last three years ___ 2- Personal financial statements including schedule of real estate owned dated within the past 30 days ___ 3- Permission to pull credit (or a copy of a current credit report) ___ 4- Resume or brief personal bio explaining experience ___ 5- Verification of liquid assets (i.e. Bank statements, brokerage account statements) For the Operating Company and Affiliates: ___ 1- Last three years of tax returns for the holding company, if applicable ___ 2- Last three years of tax returns and financial statements for the operating company and affiliates ___ 3- Interim financial statement for the operating company and affiliates dated within the last 60 days. Please also provide a YTD financial statement from the same period for the previous year. (Example: 7/30/10 AND a 7/30/09) ___ 4- Debt Schedule for the operating company and holding company that matches the debt listed on the interim balance sheet ___ 5- Business History and Description Other: ___ 1- Property description including SF, year built, construction material, property type (a copy of an old appraisal is very useful.) ___ 2- Sources and Uses ___ 3- Credit Memo from the referring lender detailing the specifics of the transaction- We basically ask for the same information that you would put into your own credit write up. For Refinance Transactions: ___ 1- A copy of the note to be refinanced, along with the most recent loan balance statement. ___ 2- When was the property purchased and what was the purchase price? For Purchase Transactions: ___ 1- Copy of purchase agreement

ZION BANK LOI REQUIREMENTS

Loan Package for Investor Properties
For all individuals who hold 20% or greater ownership in the real estate:
___ 1- Personal tax returns for the last three years ___ 2- Personal financial statements including schedule of real estate owned dated within the past 30 days ___ 3- Permission to pull credit (or a copy of a current credit report) ___ 4- Resume or brief personal bio explaining experience ___ 5- Verification of liquid assets (i.e. Bank statements, brokerage account statements) For the property: ___ 1- Rent roll (we need to know at least: tenant name, suite number, lease commence date, lease end date, SF occupied, lease rate, CAM charges (if applicable)) Vacant space needs to be included. ___ 2- Last three years of tax returns and financial statements for the subject property ___ 3- Interim financial statement for the subject property ___ 4- Copy of existing or proposed leases ___ 5- If any one tenant occupies more than 50% of the space OR is responsible for paying 50% or more of the gross rents, the last two years of financial statements on that tenant are required. Other: ___ 1- Property description including SF, year built, construction material, property type (a copy of an old appraisal is very useful. ___ 2- Sources and Uses ___ 3- Credit Memo from the referring bank detailing the specifics of the transaction- We basically ask for the same information that you would put into your own credit write up. For Refinance Transactions: ___ 1- A copy of the note to be refinanced, along with the most recent loan balance statement. ___ 2- When was the property purchased and what was the purchase price? For Purchase Transactions: ___ 1- Copy of purchase agreement

CDC DIRECT LOI REQUIREMENTS

Last year business tax return YTD business financial statement with corresponding debt schedule Last year personal return Personal financial statement Purchase agreement or letter of interest to purchase the building

FEE AGREEMENT

After we have an LOI Issued then we would need to get a fee agreement together and get have the client sign.
(Fee agreement can be found in SharePoint)

Collect the deposit for third party fees

CREATING CLIENT CONTACT - CRM

Be sure to check that the client does not already have information in CRM
If client is new then add ALL information pertaining to client into CRM including any spouse and/or children information

After contact has been created

Create the LOAN within CRM be sure you create this through the clients contact information so that everything is linked properly. ALL loan information needs to be created as well as the OPPORTUNITY added that corresponds with the loan

STAGE 2 PRE QUALIFY

Send Out Welcome Package
Create custom email within SharePoint

Gather Documents
A02 SBA Form 1244 A05 Supplemental Tax Transcript Request

Upload Information into CRM & SharePoint

(In Stage 1-5 folders)

Send Complete Package to Underwriter

CREATING CUSTOM EMAIL - SHAREPOINT

To Create Site
Click on Site Actions Click on New Site Under Team Site enter in Customer name in the title box & URL box and click create

Click on the newly created Site & click on libraries in left column
Click site actions again Click on New Document Library Then enter loan name
Click yes on ALL options & then click create ( the loan will then be found in the left column)

CREATING CUSTOM EMAIL -SHAREPOINT (Cont.)

Click on the new loan doc library that you just created & at the top of the page in the ribbon youll see library tools
Click on Library within the Library Tools ribbon Within the ribbon youll find a button labeled Library Settings Next you want to click on Incoming Email Settings
Click yes for allow document library to receive email & create a SIMPLE email address thatll be used to upload client docs to SharePoint Click yes for ALL settings and be sure to click at bottom Accept email from any sender then click OK

Your clients email will be

(Whatever u created)@wssv023.e1.serverdata.net

STAGE 3 LOAN APPROVAL

Approval from Underwriter Order Title Appraisal & Phase 1
A27 - Appraisal for Property & SBA Approval A28 - Environmental - TSA or Phase 1 & SBA Approval Appraisal Approval Environmental Approval Authorization Wizard C02 - SBA Loan Authorization & 327 Action Letters

Collect Final Documents for Closing

STAGE 4 LOAN CLOSING

Closing Documents Needed
C08 - Interim Lender Certification - SBA Form 2288 C09 - Third Party Lender Agreement - SBA 2287 C13 - Title Policy - ALTA C14 - Filed UCC - 1 C19 - Leases - EPC - OC - Tenant Certs Assignments C21 - Flood Insurance - FEMA Form C27 - 504 Loan Closing Acknowledgement & Consent C29 - Interim Lender-Note & Deed of Trust C40 - ACH Authorization & Voided Check C41 - Participation Fee C42 - Wiring Instructions Insurance Personal Property Insurance RE Proof of Project Costs & Equity Seller Note & Deed Site Visit Subordination Agreement Subordination Agreement Seller Survey or ILC Tax ID UCC Subordination

STAGE 5 LOAN FUNDING

Agreements Docs Needed Assignment of Loan Documents Assignments of Leases & Rents C01 - 504 Debenture Closing Checklist C04 - CDC Board Resolution - SBA Form 1528 C05 - Promissory Note - SBA Form 1505 C06 - Development Company DEB - SBA Form 1504 C07 - Servicing Agent Agreement SBA Form 1506 C11 - CDC Certification - SBA Form 2101 C12 - Opinion of CDC Counsel C15 - Unconditional Guarantee - SBA Form 148-148L C16 - CDC Deed of Trust C17 - Assignment of Deed of Trust C20 - Hazard Insurance C34 - Trust Agreement - Certification & Resolution C38 - IRS W-9 Form C44 - Injection-Cert Final Closing Statement & Certification Customer Update Form Lease Addendum Lease Assignment Name Affidavits Non Homestead SBA FMLP Program Authorization Agreement For Preauthorized Payment - Debit Statement Settlement Charges Third Party Lender Security Agreement Title Policy UCC UCC Post Filing Search