Draft presentation january 6, 2012

UNITED CAPITAL TM
INTELLIGENT.WORKING.CAPITAL.
United Capital Funding 1

Prepared exclusively for:
D. Michael Costello,
Principal
DECOSIMO
Chattanooga,
Tennessee
February 22, 2012
Mark Mandula,
Managing Partner
Matt Perkins,
Relationship Executive


Presentation Overview
SME Business Environment
Who are we?
What services do we
provide?
Why should we market
this?
How can we be most
effective?
What Tools?
Question and Answer


Small Business Optimism Index
110

105 January 2005 to Month to date 2011
103.7
103.7
102.5
103.7
Seasonally Adjusted 1986 = 100
101.5
101.4
101.1 101.2
100.8100.9 101.1
100.8 100.7
100 99.8 100 100.1
99.499.7
98.9
98.5 98.2
98 98.1
97.3 97.6
97.2 97.3
96.7 96.5 96.8 96.3
95.9 96 96.2
95 94.6
94.4 94.5
94.1
92.9 92.9 93.2
92.6
92.2 91.9
91.8 91.5 91.7
91.1 91.2
90.9
90.6
90 89.6
89.3
89.2 89.1 89.3 89 89
88.988.6
89.9
88.8
y = -4.9ln(x) + 110.4
88.7
88.2 88.3 88
88 88.1 88.1
87.8 87.9
87.5

R² = 0.639
86.886.5 86.8

85 85.2
84.1
82.6

81
80
2010
2009
2006

2007

2008

2011
2005


Single Most Important Issue
September 2011
Cost Insurance
Quality of Labor
6% 18% Competition Larger
8% Cost of Labor
4%
Financing/Interest Cost
3% 19%
5% Other
Inflation
8% Taxes
4%
25%
Red Tape
Poor Sales

19

United Capital Funding
April 1997
National practice;
banking “roots”
SBA Award
C.P.A. Background
Goal: Not vendor, a
partner!
Relationship, not
transaction business
First Tennessee strategic
alliance

Firm and Industry
 Niche firm exceptional  Audited Financial
track record in domestic Statements
Factoring sector  95% self generated clients
 Grossly underserved market  #1 Ranked organic [w/o
with significant growth PPC] Google website
potential  Diversified client base
 Formed 1998, consistently  Diversified geographic
profitable client portfolio
 CAGR = 20% versus  No industry
industry 4% concentration
 Diversified Fortune 500  Secure funding in place
Debtor Portfolio

Annual Factoring Volume 1998 – 2009
Billions

$180

$160

$140
$135 $136
$127 $128 $127
$120 $117
$113
$103
$100 $95 $96
$84
$79
$80

$60

$40

$20

$0

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: CFA Annual Factoring Survey
Annual Funding


Annual Factoring Volume 1998 – 2009
$180
Billions

C.A.G.R. 1999 to 2009, 3.4%
$160

$140 $135 $136
$127 $128 $127
$120 $113 $117
$103
$100 $95 $96
$84
$80
$79

$60

$40

$20

$0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: CFA Annual Factoring Survey
Annual Funding

Millions
$250
Purchased AR
$227

YTD 2011 through
October 31, 2011
$200 $193

$148 $146
$150 $145
$139

$109

$100

$75

$50
$37 $38

$24
$15
$9
$5
$1
$-
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011YTD


Leadership
 Exceptional depth in ownership and
management group
 Ivan Baker, CPA, CFO
 Since formation 1998
 Board of Directors, Commercial
Finance
Association, International
Finance Association
 Chris Youmans, CPA, President
 COO since 2000
 Mark Mandula, CMO
 Since 2000
 Involved Board of Directors
 Excellent Partners
 Well trained, seasoned professional
team members United Capital Funding 45

Cornerstone Positions
 We must at all times have an
uncompromising determination to
achieve excellence.
 We must be assertive but fair to our
competition.
 Teamwork is critical. There is no
room for people who put their
personal interests first.
 Complacency will lead to extinction.
 Our goal is provide consistent
returns to our shareholders by
serving our clients well.


Success Drivers
Well seasoned leadership
Close client contact
Successful navigation thru numerous
economic cycles
Continuous improvement in client servicing
Expertise in execution and technology
Online tools + high touch = best of both
worlds

How do we combine
technology and
social interaction
to create value


Our Practice Focus
“In good
times, trusted client
partnerships will fill
your sails with wind;
in a difficult
economy, they
provide essential
ballast that will
keep you on an
even keel.” United Capital Funding 49

Service-Profit Chain
Internal Service Quality
Employee Satisfaction
Employee Retention +
Productivity
External Service Value
Client Satisfaction
Client Loyalty
Revenue Growth = PROFIT


What is Factoring?
Accounts Receivable factoring
Purchase invoice advancing % of the face
value of the invoice [usually 80%]
Balance, less fees and reserve remitted to
client upon collection by our lockbox
Notification + verification based factoring
Client gets immediate cash
“Outsourcing”
TM
Intelligent.Working.Capital.


What this is not…..
NOT a loan
NOT based on net
worth or cash flow
NOT lender “last
resort”
Time in business is
not important
Serve as “credit
manager and/or
outsource partner”

Professional Services
 Accounts Receivable
Management
 Working Capital
 Professional, turnkey AR
monitoring
 Access to Credit Insurance
 Ability to credit qualify
prospect/debtor at no cost
 Secure, 24/7 online reporting
 Secure, lockbox services
 Peace of mind


Client Attributes
$0 to $25 Million
Any stage lifecycle
Limited collateral
Funding in most
industries, but not
construction and
medical firms
Startups ok!
Client must have
sufficient margin


Primary Industries Funded
Staffing
37% portfolio
All kinds


Manufacturing
18% portfolio


• Distribution
• 11% Portfolio


Technology
9% portfolio


• Service
• 17% Portfolio


Extensive Government AR
Federal, State,
Local, Other
Quasi
Government
Universities
School Districts


Operating Philosophy
Relationship, not
transaction
orientation
Constant, ongoing
monitoring of QOS
Written, confidential
client / new client
Application surveys
“Grading” partners

Operating Philosophy
Very selective
Personal credit
screening / FICO
Initial & ongoing Due
Diligence
Existing clients key
source of new clients
via referrals
Professional network

Client Funded FICO
710

700 Percentage change YTD = 4.6%
702
690
9 year average = 652
680

670

660 671
652 655 661
650 648
638 640 649 652
640

630

620

610

600

2002
2003
2004
2005
2006
2007
2008
2009
2010
2011 YTD


Diversification
Strategy designed to
reduce exposure to risks
by diversifying at all
levels”
Debtor [clients’ client]
Industry sector
Geographic location
Client pedigree /FICO


Current Portfolio
18
37
17

8 9 11

Staffing Distribution Service
Manufacturing Technology Other


Client duration
21%

29%
14%

8%
Our duration average
4.4 years; 18% 6% 4%
Industry >12 months

2010 2009 2008 2007 2006 2005 2004 earlier


Geographic Client Locations
14%

24%
58%

4%

West South Northeast Midwest


Client Locations by State
MT
0%
MA MD MN MO NC
IA IL IN 3% 2% 3% 1% 2% NJ NV
1% 4% 0% MI 1% 1% NY
3% 4% OH
1% PA
GA 6%
10%

SC
9%

FL
33%
TN
AL 7%
TX
0% 2%
VA
VT 1%
CA AZ 0%
DC CT 1% 0%
3% WA
0%
2%


Number of Invoices
120,000

110,076

99,463
100,000
95,540
93,262
Through
86,905
November
30, 2011
80,000 77,063

60,000
54,530

40,838
40,000

22,385

20,000 14,373
13,183

6,931
1,383 2,128
125
-
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011YTD


Average Invoice Size $
$3,000.00

$2,500.00

$2,000.00

$1,500.00

$1,000.00

$500.00

$-

2000 2001
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


Why are we different?
Solutions @ any
stage lifecycle
Respect +
empathy clients
Financial clout
large firm with
speed + services of
small firm

Economic Lifecycle


Needs change over time
Opportunity Inception Launch Grow Harvest Evolve / retire

High

Growth/ Company revenues are not the
Activity only indicator of attractiveness.
Our practice best lends itself to
companies, large or small, who
are in an innovating, high-
growth/high-demand situation.

Low
Start up
Small Business
Company Mid-market
Size
Enterprise (departmental)


Why are we different?
No term
Minimums
Start up fees
Termination fees
Per invoice
Client remains in
control


Recent Milestones
Will Have Funded $1.5
Billion Cumulatively
since formation in 1997
Financially solid, stable
Several industry players
leaving due to lack of
funding and/or losses
First Tennessee support


What our clients say….
 Your entire staff is awesome! I really enjoy working with everyone. - Florida
Technology Company
 Since we have been a client of UCF’s we have had the pleasure of working with
great account specialist assigned to our account. Each of these specialists has been
extraordinary and we could not ask for better employees to represent us in
collections. - Tennessee Molding Company
 As always out account specialist has been great. I look forward to our continued
business relationship. - New Jersey Transportation Company
 Our representative has been outstanding. - Ohio Technology Company
 We had an accounting issue in December 2010. The CFO was extremely helpful in
assisting us in resolving that issue. He went the “Extra Mile.” Great Job. -
Connecticut Supply Company
 Thank you so much for your help. I don’t know what I would have done without
you. - Alabama Government Company


What our clients say….
 The account representative is the best. When she had an emergency medical
leave, the replacement obviously had been well information on our account
resulting in a flawless transition. I would highly recommend UCF to anyone
seeking a funding company. The online reporting system is great. I really like how
tightly secured that it is. - Georgia Government Contracting (Consulting)
Company
 UCF had been a great partner to my company. My account representative has
been extremely professional and helpful on every transaction. I recommend UCF
every chance I get. - Florida Government Contracting (Supply) Company
 My account representative is always ready to handle any issue in a pleasant
manner. She is always reliable and returns calls and emails in a timely manner. -
Nevada Manufacturing Company
 Thank you for all your help. You’re a great match for our company. -
Washington Manufacturing Company
 My account representative continues to provide my company with excellent
services. - Tennessee Service Company


Survey Results
 You and your team are awesome! We truly appreciate all of your help
and support. You guys really jumped through a lot of hoops this first time
around to pull everything together. We look forward to a long and
successful relationship with your company! - Distributor, California
 I am very pleased with the service and the process was explained very
well. Your communication is on TIME!!!! Keep up the good job. - Service
Provider, Ohio
 I am impressed with the professionalism of your company. Keep it up. -
Security Company, Maryland
 You were willing to work with a small company like mine, and I cannot
tell you how much I appreciate it. It has been a pleasure working with
everyone there, and I will refer others to UCF every chance I get. Thanks
again. - Service Provider, Connecticut
 You are easy to work with and my Account Representative does an
excellent job. - Consultant, Pennsylvania

Survey Results
 You had better terms in your proposal and your staff is more
friendly than competitors. - Engineering Firm, Tennessee
 My Account Representative is a great asset. -
Distributor, Pennsylvania
 We continue to appreciate our business relationship with
United! - Security Products, Illinois
 My Account Representative has been great to deal with and
very professional. - Transportation Company, New Jersey
 I can not thank you enough as UCF has been a godsend for
my company. I am very happy with the service. Mark, thank
you for visiting with me. You sold me on your company. -
Security Services, Maryland


Survey Results
 I rate our representative as the best customer service I have ever
experienced. - Internet Marketing Company, Ohio
 A special thanks to our Account Representative for her dedicated service
to our company. - Staffing Company, Tennessee
 I would like to mention that my Account Representative is wonderful.
She is very quick in response to my requests, and goes out of her way to
provide assistance. - Civil Engineering Company, Virginia
 United has been a good partner for our company over the years. We
appreciate United Capital Funding greatly. - Storage Solution
Firm, Minnesota
 We couldn’t ask for a better partnership. Every member of UCF, from the
top down, has been wonderful to work with. In particular, our account
representative is excellent! UCF has helped us tremendously with our cash
flow situation. - Communication Company, Tennessee


Survey Results
 My Account Representative is a joy. The level of service UCF
provides exceeds the relationships experience with other financial
institutions. The online reports are very helpful. I highly endorse
United Capital Funding. - Consulting Company, Georgia
 When ever I contact my account representative, either by phone
or email, she always responds quickly, and is always helpful and
friendly. - Distributor, Nevada
 It is a pleasure working with my account representative. Your
company has helped us in this down economy. - Supply
Company, California
 Great to work with. My account representative at UCF is “The
Best.” Thank you UC Funding. - Distributor, California


Professional Fees
• Simple, JIT Model
• 5 day fee
FUNDING, not invoice
date to collection @
lockbox
• Wire / ACH fees
• No other fees
• All fees are itemized
per invoice, and
available online

Professional Fees
• Determined by:
• Size of AR
• “Pedigree” clients
• Concentration vs.
diversification
• FICO score
• Credit insurance


Professional fees are….
Less than credit card
merchant fees
Less overdraft APR
More than traditional
bank line of credit
No personal guarantee
All services bundled
Fees itemized invoice
Profitability modeling
Incredibly competitive


Professional Services
 Accounts Receivable
Management
 Working Capital
 Professional, turnkey AR
monitoring
 Access to Credit Insurance
 Ability to credit qualify
prospect/debtor at no cost
 Secure, 24/7 online reporting
 Secure, lockbox services
 Peace of mind


Many ways we can help..
• Credit
Information
• Credit Insurance
• Commitment to
Fund Letters
• RFP Support
and Logos

Unmatched Internet Presence
Relationship with First
Tennessee Bank
Established referral
program/training
Pioneer on the Internet
Social Media Project
well underway
Clients in 34 states
Scalable, with no
geographic constraints


First Tennessee Alliance


Blog


As featured in


Facts vs. Myths
The perception of
our industry is the
single largest
misconception we
encounter
Our website is an
educational resource
www.ucfunding.com
114

Facts vs. Myths
Myth: Factoring is
used businesses in
“bad shape” or
Fortune 500 firms
Fact: Used by all
sized businesses
Huge industry $130+
Billion


Facts vs. Myths
Fact: used more
than ever, start up
to mature
 Astute managers
use it;
outsource, lower
breakeven point


Fact vs. Myths
Aoccdrnig to rscheearch at
Cmabrigde Uinervtisy, it Myth: If you factor,
deosn't mttaer in waht oredr customers get
the ltteers in a wrod are, the
olny iprmoatnt tihng is taht “nervous” and leave
the frist and lsat ltteer be at Fact: Never
the rghit pclae. The rset can happened 10+ years
be a toatl mses and you can
sitll raed it wouthit a
serving
porbelm. Tihs is bcuseae the Use surveys to
huamn mnid deos not raed ensure quality
ervey lteter by istlef, but the
wrod as a wlohe.

Facts vs. Myths
Fact: Actually can
cement relationship
Ability prequalify credit
limit critical
Assertively sell more;
average sale can
increase
Less dependent on
personal credit

Facts vs. Myths
Myth: If you
factor, offend or
alienate clients
Fact: Goal is to
grow, not “offend”
Illogical aggravate in
any way
Proactively provide
references


Why Factoring?
To acquire potential new clients
Increase universe clients and cross sell
other DECOSIMO universe of services
Provide liquidity option for clients
Provide quick cash vs. “bank” financing
Fee Income
Startups /”non bankable” clients ok

Why Factoring?
Be an even more “full service” provider vs.
others in marketplace
Factoring enhance that DECOSIMO gets paid
Allows DECOSIMO to extend the duration of
the client relationship
DECOSIMO / Relationship Manager earn
referral fees for relationship life time, if able


Marketing Ideas
 PROSPECTS •
 Perfect fit for Emerging
Business Services
 DeMoss Accounting
 Corporate relocations
 Others that do not meet
Bank criteria
 Current loan declines
 8 (A) clients
 Clients with SBA loans


Marketing Ideas
Limited number of Average life 5 years
referrals Industry avg. 12-14
Current Client months
Database Annuity referral fees
Limited Geographic @ 10% monthly
Overlap Internal allocation is
Client demographics 100% up to you
nearly identical for Volume goes up
prospects/clients over term of
relationship

Marketing Tools
Multiple Step Process
Online Tools
Professional Training
FAQ, New Client
Performed by us
We provide all
Relationship educational materials
Managers, etc.
PowerPoint (s)
Quarterly training
Regional meetings
sessions
Industry specific
Training Manuals
consulting


Partnership Approach
Identify qualified clients All record keeping
and contact completed by us
Provide marketing Same amount paid for
materials to clients life relationship
Coordinate & meet
clients 10% of all revenue
generated
Assist maintenance of
relationship Monthly
Referral fees for entire documentation and
life of relationship online information


Our Responsibilities
Respond quickly Due Diligence; 1 week
Give priority to requests on average
and calls Funding; 7 to 10
Meet client and days, subject to
conduct Due Diligence verification
Time for response Ongoing Online
Application; same day reporting
Proposal or Decline
Dedicated Account
Agreements; one
business day Representative for each
client relationship
United CapitalPartnership approach 141
Funding

Standard Inquiry Steps
Personal credit on
Principal(s)
Comprehensive
Background check
Corporate, debtor search
Underwrite
Price Relationship
Proposal/No Interest
Letter
1 Business day

Marketing Tools Available
Brochures
Top ranked Google
website,
www.ucfunding.com
Quick Application
Frequently Asked
Question [FAQ]
Documentation
Requirements
New Client Package

Frequently Asked Questions
What if a Bank has already said No?
Possibly ok. FICO score a key. Client’s
worth, profitability, time in business, etc. are
not the primary focus.
How much does it cost?
Our Agreements clearly defines the pricing of
our services. No surprises or hidden costs.
Validate with references


How do I apply?
Online, fax, meet with a client in person.
Never any fees to apply.
How are client invoices verified?
We use a variety of methods to ensure
payment is received. We never
inconvenience client. Excellent references
are the key here. Generally voice
verification by a courteous, trained
professional.

What if client assets are already pledged?
We need a 1st position on AR. We use industry
standard subordination / Intercreditor
Agreements, no costs.
What industries do we fund?
All, except medical, most construction
consumer, insurance and legal.
Does a client have to factor all AR?
No. They factor what they want.


What does clients say when A/R is sold?
Never been a issue. References are a
key. AP and contact are usually 2
separate functions. Also EDI makes this
less and less of an issue.
How quickly can a client get started?
Usually a week.
Is there online reporting? Yes, secure
24/7, no cost.

There are no stupid questions


We are only a click away


We will respond quickly…


Partnership
We succeed when
clients successful
Key to success is
partnership with
clients, partners,
Continue operate
with highest levels of
integrity

UNITED CAPITAL TM

Draft presentation january 6, 2012

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Draft presentation january 6, 2012