WELLS FARGO FINANCIAL

(formerly known as Greater Bay Capital)

THE ADVANTAGE IS YOURS!

&

Capital Finance

WFC Highlights

•Ranked #1 as a small business lender.

•Ranked among the nation's top 40 private employers and among the top 10 in the nation for corporate donations.

•Ranked 16th most admired company in the world.

•Publicly traded on the NYSE, symbol WFC

•3rd largest US bank

•Only US Bank to be rated “AAA” by Standard & Poor’s

•Rated “Aaa” by Moody’s

•Over $575 Billion in assets.

•Ranked top 50 corporate citizen.

ContactsEd Fanning Victoria SwansonDiane Sindles Chrysti IndenValerie Chumbley Julie Creel

Phone: 866-422-5438 Fax: 888-375-3288

300 Tri-State International Lincolnshire, IL 60069

CONTACT US

According to the US Dept of Commerce 80% of all US businesses lease some or all of their equipment.

Cost Justification: a low monthly payment allows the equipment to be profitable from day one, through the revenue produced and expenses saved.

Conserves Capital and Buying Power: allows the customer to retain available lines of credit and preserve working capital for otherinvestments, emergency needs, overhead, etc.

Simplified Billing: contracts can include maintenance payments and other soft costs.

Least Expensive Method of Financing: accelerates depreciation allowing the customer to expense monthly payments as rentals while enabling them to swiftly recapture their investment over the term of the lease (consult your tax accountant).

Benefits of Leasing

Flexibility: allows the customer to upgrade their equipment or add-on to their existing contract at any time during the term without any penalty.

Master Leases: a master lease is designed for customers purchasing multiple units. It allows the customer to sign individual schedules to track each piece of equipment.

Increased Profits: companies that lease know they make money by using the equipment not owning it. They can then remain focused on their core business.

Benefits of Leasing

Avoid Sticker Shock: a monthly payment is much more attractive than the sticker price in full.

Simple Documentation: We will prepare all paperwork, no UCC forms.

Prompt Turnarounds: credit applications are decisioned within 24 hours.

Competitive Rates: We offer great rates for new and used equipment.

Leasing Advantages

Leasing Advantages (con’t)

Full Payment Upfront: usually the same day, when all necessary paperwork is received (e.g. signed lease, advance payments, verification of acceptance notice, and dealer invoice) we will initiate funding via one of the following:

Electronic funding transfer – directly into the dealerships checking account via ACHExpress payments – checks are sent via overnight delivery

Repeat Business: customers that finance their equipment are more likely to upgrade at the end of the term as payments are already in their budget.

Co-branded Single Sided Lease Document: Our single sided Komatsu lease contract can be e-mailed directly to you or your customer!

Tax Lease

TRUE LEASE OR TAX LEASE offers the primary benefits commonly attributed to leasing. OWNERSHIP FOR TAX PURPOSES RESTS WITH THE LESSOR WHO CLAIMS TAX BENEFITS OF OWNERSHIP (accelerated write-off – payments expensed as rental for tax purposes.)

THE LESSEE, IN TURN, CAN REALIZE SUBSTANTIAL COST SAVINGS AS THE LESSOR PASSES SOME OF THOSE BENEFITS THROUGH TO THE LESSEE IN THE FORM OFREDUCED LEASE PAYMENTS. And, under a true lease agreement, the lessee can deduct the full payment as an expense for tax purposes.

With a tax lease the lessor is the owner of the equipment and the Lessee has the option to:

Upgrade lease property Purchase leased propertyContinue to lease, or Return leased equipment

The lower cost of leasing realized by the lessee through out the lease term must be weighed against the loss of the residual value when the lease term ends. The significance of giving up the residual value can be greatly reduced if the lease term covers a substantial portion of the equipment’s economic life. The right of first refusal allows the dealer to continue to control the equipment throughout the contract and at lease end.

$1.00 Buyout Lease

A $1.00 BUYOUT LEASE(CONDITIONAL SALES CONTRACT) IS REALLY A LOAN DISGUISED AS A LEASE

This type of lease transfers all incidents of ownership of the leased property to the lessee and when the lease term ends, automatically passes title to the lessee.

The Lessee treats the equipment as owned, depreciates the equipment, claims any available tax credits and deducts the interest portion of the payment as an expense for federal tax purposes. Although the lessee is considered the tax owner of the equipment during the lease term, the lessor usually retains legal title until all terms and conditions of the agreement have been satisfied.

The Lessor treats the transaction as a loan and cannot offer the lower rates associated with a tax lease, or operating lease, since it does not receive tax benefits of ownership.

Operating Lease

THIS TYPE OF LEASE IS STRUCTURED TO MEET ALL FOUR OF THE TESTS OF FASB #13FOR OFF BALANCE SHEET ACCOUNTING TREATMENT MENTIONED BELOW.

Greater Bay Capital can structure the transaction to meet the objective of off-balance sheet accounting treatment by structuring the transaction, at the inception of the lease, as an “operating lease” under the following four criteria as defined in the Financing Accounting Standard Board Statement 13 (“FASB 13”):

A. The lease term does not contain a bargain purchase option.

B. The lease term is less than seventy five (75%) of the estimated economic life of the leased property

C. The present value at the beginning of the lease term of the minimum lease payments is ninety percent (90%) of the fair market value of the leased property to the lessor at the inception of the lease. The lessee shall compute the present value of the minimum lease payments using their incremental borrowing rate.

D. This type of contract is treated as a rental by the lessee.

E. The payments are expensed as rental for tax purposes as well as on companies’ financial statement (annual report).

F. The operating lease is extremely popular with publicly held companies.

G. In an operating lease the lessor is the owner of the equipment and the lessee has the option of:

a. Upgrading lease opportunity

b. Return leased property

c. Purchase leased property

d. Continue to lease/rent

Operating Lease (con’t)

Economic Stimulus Act of 2008

The 2008 Economic Stimulus Act allows a qualifying taxpayer to write off the full purchase price of equipment (up to $250,00) as an expense and deduct it in the year the property is placed in service instead of depreciating it over several years. The new guidelines for 2008 are as follows:

•Deduction limit is increased to $250,000

•Maximum investment limitation is increase to $800,000

•Special additional first year depreciation allowance of 50% on the remaining amount

This allows for tax relief immediately and makes leasing equipment a financially sound decision. Qualified business assets include machinery, equipment, furniture, fixtures and off-the-shelf software.

The Economic Stimulus Act of 2008 makes this the time to buy! The available Section 179 expense deduction may allow a company to almost double the amount of equipment that can be expensed-from $128K to $250k for the 2008 tax year.*

$250,000 Section 179 Deduction

_________________

Bonus Depreciation

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Immediate Tax Relief

*Work with your accountant or tax advisor to learn how 2008 stimulus package can work for you.

Always a known purchase option, NO Dangerous FMV Games!

The ability to retain a fixed purchase option for yourself for greater up side and safety. (Without a fixed purchase option letter, either you or your customer will overpay for the equipment or pay for its return and recondition at FMV lease end.)

Customer Protection Program: All calls for buyouts and upgrades are turned over to you if you hold the option. This locks out the competition while ensuring repeat business.

What we can offer you!

Pass-thru Maintenance: As an accommodation we will collect and fund monthly maintenance at no charge! This will enable your customer to receive one fixed payment per month

No early payoff penalties. We will assess a minimal fee and the unearned interest is rebated!

Omaha Steak Promotion

Great Benefits

One Steak buck is earned per $10,000 financed

Steak bucks are awarded after funding

Steak bucks are mailed and redeemable directly through Omaha Steak’s catalog

Top 10 Material Handling Sources

Hewlett Packard 17BII/19BII Financial Calculator

DEFINITIONS: PMT: Payment which will either be the monthly lease payment in dollar value or the rate

factor. Should be entered as a negative because it is money the customer is paying out.

PV: Present value or the amount financed. Can be entered as a dollar value or as 1. If

entering a rate factor for the payment then the PV will be 1. This is because the rate factor is the payment amount per one dollar financed. If entering a monthly payment as a dollar value then PV will be a dollar value too. The PV should be entered as a positive.

FV: Future value is the residual value assigned to the amount financed. Can be entered as

a percent or dollar value. If PMT and PV are dollar values then this should be consistent. If PMT is a rate factor and PV is 1 then this should be entered as a percent. This should always be entered as a negative because it is also money the customer is paying out.

I%YR: Interest rate per year (APR). Always entered at face value. N: Lease term in number of months. Example: for a 5 year lease N would be 60 for 60

months. # ADV: Number of advance payments. It should always be entered as a number.

0.00000 PMT Payment

PV Funding $

FV Residual

I%YR Interest Rate

N Term

#ADV # Adv Pmts

EXAMPLE 1 The dealer wants to know what their customer’s lease payment would be for a $25,550 forklift truck. They would like a 20% residual (or buyout) at the end of the lease. Assume our current special interest rate on a residual lease is a 6.5% APR. (PV) Funding Amount: $25,550 (PMT) Rate Factor: ? (N) Lease Term: 36 months (#ADV) Advance Payments: 0 (FV) Residual: 20% ($5110) To calculate the rate factor you will enter in the information you already know. In this example to solve for a rate factor you will enter the PV as 1 (because the rate factor is the rate per dollar financed) and the residual value as a percentage.

PV = 1 FV = -.20 I%YR = 6.5% N= 36 #ADV = 0 Once you have all these entered you hit the arrow key below PMT. It will solve for the PMT (rate factor). It does come up as s negative because it is still what the customer is paying out per dollar. When you actually calculate the monthly payment you will take the $25,550 x .02560 (positive) = $654.08. The customer’s lease payment will be $654.08 per month for 36 months.

PMT Payment

PV Funding $

FV Residual

I%YR Interest

N Term

#ADV # Adv

PMT= - .02560

EXAMPLE 2 Your dealer wants to match a competitors subsidized rate of 5.9% APR for his truck. This truck qualifies for the standard rate of 7.9%. If he wants to offer a 5.9% interest rate, how much does he need to blindly discount his invoice? The cost of the truck is $21,000 with a $1.00 buyout. (PV) Funding Amount: $21,000 (PMT) Rate Factor: ? (N) Lease Term: 60 months (#ADV) Advance Payments 0 (FV) Residual: 10% ($2100) There will be two calculations necessary to figure out the discount the dealer will have to take. First, we have to find the rate factor (PMT) by entering in the information you already know. In this example to solve for a rate factor you will enter the PV as 1 (because the rate factor is the rate per 1 dollar financed) and the residual value as a percentage.

PV =1 FV = -.10 I%YR = 5.9% N = 60 #ADV = 0

Once you have all these entered you hit the arrow key below PMT. This will solve for the PMT (rate factor). It comes up as a negative because it is what the customer is paying out per dollar.

Once you have the rate factor for a 5.9% APR you need to calculate what the PV (or equipment funding) is based on this rate. Because our current base rate is 7.9%, you will leave all the information in but enter the interest rate in as 7.9%. Then you will solve for the PV to determine what the discount rate will be.

This means we can pay you 96.5% of your invoice total. Or 1-.9498=.0502. The dealer would have to discount his invoice 5.02% or in this case $1,054.20.

PMT Payment

PMT Payment

PV Funding $

PV Funding $

FV Residual

FV Residual

I%YR Interest

I%YR Interest

N Term

N Term

#ADV # Adv

#ADV # Adv

PMT = - .01785

PV = 0.94984

PROGRAMMING YOUR HP 17BII/19BII CALCULATOR

The solver equation for advance payments: ADV: PMT = (-PV-FVx (SPPV(I%YR ÷ 12:N))) ÷ (USPV(I%YR ÷ 12:N-#ADV) + #ADV) For the # character, press WXYZ OTHER # PMT = the monthly payment PV = the value of the equipment FV = the residual value I%YR = the annual interest rate as a percent N = the total number of payments # ADV = the number of advance payments

0.00000PMT Payment

PV Funding $

FV Residual

I%YR Interest Rate

N Term

#ADV # Adv Pmts

Questions!