BdC Corporate Credit Department Information Document. Introduction

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1 BdC Corporate Credit Department Information Document Introduction The Banco di Caribe Corporate department aims to offer the best quality service and the most appropriate solutions to its customers whether small business units, large corporations, public companies or other corporate customers. Through a team of experienced and highly qualified Account Managers, the department offers a wide range of financial products and services to its corporate customers and in collaboration with the other departments design tailored made and well integrated solutions to meet present and future needs of the corporate clients. Corporate loans A loan gives your business an immediate infusion of funds designated for a specific purpose either for one-time expenditures or long term financing such as fixed asset purchases, permanent working capital, business expansion and acquisition. The term and interest rate differ with each financing purpose and request; several aspects are considered one of them being the company s capacity of repaying the loan and the other the collateral guaranteeing the loan. These are discussed and agreed with the client prior to disbursement of the loan. Corporate loan types Term loans: Whether you are looking to finance capital expenditures, expand your business into a profitable new area, a Banco di Caribe Term Loan is your answer. Each Term Loan we service is designed specifically to meet your needs, and is typically structured to be repaid in three (3) to five (5) years. Term loan features: v Provides a one time lump sum with fixed monthly repayments v Can be used to purchase inventory, materials, vehicles (new/used) or (heavy) equipment v Secured by the floating asset you re financing v Borrow up to 70% of the purchase price

2 Term loan requirements: v Business must be established for at least two (2) years v Copy of invoices validating purchase price v List of company machinery & equipment, inventory & stock signed and dated v Aging list of company Account Receivables signed and dated Real Estate loans: Banco di Caribe real estate loans lets you finance commercial properties for retail, industrial, office or mixed use, with a repayment term up to 15 years. Business owners looking into the acquisition of a personal residence are given the opportunity to finance their property up to 25 years, with a maximum loan cancellation age of 60. Resident Real estate loan features: v Can be used to construct, purchase, or refinance an owner-occupied business property, or expand or remodel existing facilities v Provides a one-time lump sum for real estate purchases v Secured by the real estate property you re financing through the rights of Mortgage v Up to a maximum of the Foreclosure value v For real estate construction, the mortgage loan is disbursed according to a construction disbursement schedule Non Resident Real estate loan features: v Can be used to construct, purchase, or refinance an owner-occupied business property, or expand or remodel existing facilities v Provides a one-time lump sum for real estate purchases v Secured by the real estate property you re financing through the rights of Mortgage v Up to a maximum of 60% of the Purchase price or Market Value, whichever is lower v For real estate construction, the mortgage loan is disbursed according to a construction disbursement schedule Real estate loan requirements: v Business established two (2) years or more

3 v Copy of Purchase contract required (if purchase) v Construction budget (if construction) v Copy of a recent appraisal report less than one (1) year, prepared by one of the Banks preferred appraisers. Cash Secured loans: A cash-secured loan is a type of credit that has cash as collateral. In contrast to other secured loans (mortgages), this loan is extended when a borrower can prove that he or she has cash to protect the lender's (bank) investment. These loans are usually structured to be repaid within five (5) years. Cash secured loans features: v Used to purchase inventory, materials, vehicles and equipment v Provides a one time lump sum with fixed monthly repayments v Lets you use your Certificate of Deposit or savings to secure the loan Cash secured loans requirements: v Funds must be positioned on a BdC Certificate of Deposit (CD s)or savings account Business Credit line (working capital financing) Every business has its ups and downs - seasonal peaks and valleys that can affect income and expenses. A Line of Credit from Banco di Caribe is the perfect way to ride out those bumpy stretches, knowing you ll always have funds available to meet the short-term needs of your successful business by allowing you to borrow, repay, and re-borrow funds as needed. Credit line features: v Used for funding payroll, improve cash flow, purchase of materials and inventory, financing of Account Receivables, seasonal working capitals or emergency funds v Pay no interest until you draw funds, interest is charged only on the portion of the line you use

4 v Secured by company s floating assets, investments (CD s) or real estate. Credit line requirements: v Business established two (2) years or more v List of company machinery & equipment, inventory & stock signed and dated v Aging list of company Account Receivables signed and dated v Copy of a recent appraisal report less than one (1) year, prepared by one of the Banks preferred appraisers (if there s real estate securing the loan) Letter of Credits: Banco di Caribe (issuing Bank) offers letter of Credits which is a document, used primarily in international trade, where the Bank issues to a seller (beneficiary) of goods or services a Letter of Credit, guaranteeing that the Bank will pay the seller, for goods or services the seller delivers to a third-party buyer (Bank s client and applicant) provided that all conditions mentioned in the Letter of Credit are met. Letter of Credits requirements: v Funds to complete purchase must be positioned on a BdC checking or savings account Bank Guarantees: Bank Guarantee is a guarantee issued by the bank at the request and for account of the borrower, whereby the Bank commits to pay the beneficiary up to the guaranteed sum in the event of a claim received by the Bank under the Bank Guarantee Bank Guarantee requirements: v Full amount of the guarantee must be secured by cash available on a BdC checking or savings account Credit evaluation and approval The evaluation of a credit takes place during the credit evaluation process when several criteria s are evaluated such:

5 v The Character of the business owner, his credit history, banking history and experience he/ she may have in the field of business v The Capacity of the business owner of managing the existing/new loan payments next to other day to day expenses. v The Capital that has been invested in the company by the owner. A higher capital injection illustrates the owners commitment towards the business v The Collateral, being the value of the total assets the business owner is willing to pledge as collateral for the loan v The Conditions, being the economic, industry and market conditions in which the business is operating. Other conditions at approval Upon approval of a corporate loan, several other conditions can apply next to the above mentioned loan requirements per loan type; such as a term life insurance and personal accident insurance on the life of the business owner, extended fire insurance and fiduciary ownership transfer on the property, inventory, machinery & equipment, All risk vehicle insurance on the financed vehicle or truck, salary assignments, assignment on account receivables/ rental income or a corporate guarantee by the operating company if the borrower is the business owner himself. Loan disbursement and monitoring The loan is disbursed after the conditions and requirements have been discussed and agreed upon with the borrower, the financing agreement has been signed by both parties and set conditions have been met. Upon disbursement the Bank monitors the loan on a monthly basis for loan compliance and once a year a full annual review is performed by the Account Manager. For the annual review, the borrower is requested to submit his latest company financials, proof of payment on insurances, only if these were not arranged by the Banks insurance broker, and updated lists of the company s floating assets and account receivables (signed and dated). If a borrower becomes delinquent (does not comply with his/her Bank debt obligations), the Bank reserves the right to take any legal actions and so ensure its return on the borrowed funds.