1. direct lending fund general fund presentation v2

Generating Monthly Cash Income

From Fully Amortizing Consumer Term Loans as of July 2012

DIRECT LENDING

REPLACING LOST YIELD

All statements made herein are confidential and made for informational purposes only. No offering of securities is being made hereby. 2

Interest Rates are at Historical Lows

Investors are being forced to make difficult decisions ⁺ Accept historically low interest rates on short duration investments

⁺ Take duration risk by tying up capital for longer periods

⁺ Accept volatility risk or loss of principal if rates rise in the future

We went looking for a better alternative

Source: Bloomberg July 2012

1 year

3 Year

5 year

10 year

30 year

US Treasuries 0.17% 0.32% 0.64% 1.53% 2.61%

Munis 0.20% 0.45% 0.61% 1.62% 2.77%

Bank CDs 0.72% 1.30% 1.41% n/a n/a

AA Corporate 0.30% 0.42% 1.40% 2.64% 4.00%

OUR TARGET


Provide investors with consistent cash income without taking significant principal risk ⁺ 9% - 11% interest income net of all fees and expenses

⁺ Average duration of 30 months

⁺ Highly diversified portfolio

⁺ No leverage

9% - 11% Interest

Where did we find these qualities?

THE YIELD ON CONSUMER CREDIT REMAINS HIGH


0%

2%

4%

6%

8%

10%

12%

14%

16%

T-bills 10 yr T-Notes

10 yrMunis

30 yr T-Bonds

30 yrMunis

ConsumerCredit

1981 2012

“Credit spreads on unsecured consumer credit are attractive on both a relative and absolute basis and have proven durable over a variety of interest rate cycles”

Source: Federal Reserve

Over the past 30 years, cash yields on most investments have declined while interest rates on consumer loans and credit cards have remained high

PRIME & SUPER-PRIME BORROWERS


Average Credit Score

712

Borrower Credit Profile

<50

0

50

0 - 5

09

51

0 - 5

19

52

0 - 5

29

53

0 - 5

39

54

0 - 5

49

55

0 - 5

59

56

0 - 5

69

57

0 - 5

79

56

0 - 5

69

57

0 - 5

79

58

0 - 5

89

59

0 - 5

99

60

0 - 6

09

61

0 - 6

19

62

0 - 6

29

63

0 - 6

39

64

0 - 6

49

65

0 - 6

59

66

0 - 6

69

67

0 - 6

79

68

0 - 6

89

69

0 - 6

99

70

0 - 7

09

71

0 - 7

19

72

0 - 7

29

73

0 - 7

39

74

0 - 7

49

75

0 - 7

59

76

0 - 7

69

77

0 - 7

79

78

0 - 7

89

78

0 - 7

89

79

0 - 7

99

80

0+

WEAK MODERATE STRONG EXCELLENT

Target Loans

Loan Purpose

Credit CardPay-Off

Personal

Business

Home

Other

Dominant Loan Purpose is Credit Card Pay-Offs

Prime Super-Prime

CONSUMER CREDIT – GOOD LOANS TO GOOD PEOPLE


⁺ Bank’s with high cost infrastructure can no longer make small loans profitably

⁺ Huge unmet consumer demand - 60% of loans are to pay-off credit cards due to high interest rates and reduction in available credit

Banks have abandoned their historical foundation of making small loans

Ed the Electrician + Lives in Indiana

+ Has had the same job for 10+ years

+ Makes $86,000 a year

+ Has a FICO score of 718

+ Hasn’t had a delinquent payment in at least 5 years

+ Owns his own home

+ Wants to borrow $7,000 to pay-off all his credit card debt

+ His local banker “doesn’t make installment loans anymore”

ONLINE LENDING – A NEW PARADIGM


LENDING PLATFORMS

BANKS

New consumer lending platforms allow investors to “be the bank”

INVESTING THROUGH LENDING PLATFORMS


A powerful new alternative to the traditional banking model for credit origination

⁺ Over $1 billion lent across 114,000 loans through May 2012

⁺ Currently $56 million per month growing 5% month over month

⁺ Over 5,000 new loans each month

⁺ Fully amortizing unsecured consumer loans

⁺ Short Duration: Combination of 3 & 5 year loans

⁺ Loan level transparency (publicly available data)

⁺ Disruptive Internet-based lending model is more efficient than traditional banking, using technology to:

⁺ lower the cost of loan origination

⁺ build broadly diversified loan portfolio by geography, borrower credit, loan size, and loan type

⁺ Automated credit scoring and credit verification

⁺ Growing number of Lending Platforms

Be the Bank

FRACTIONAL OWNERSHIP PROVIDES

GREATER BORROWER DIVERSIFICATION


More borrowers means further diversification by geography,

employers, and other borrower characteristics

One borrower Multiple

lenders

The Fund holds a fraction of any single loan, for example $2,000 of a $6,000 loan. Fractional ownership permits broader diversification – each invested dollar participates in more loans

DIRECT LOAN ORIGINATION PROCESS


BORROWER INQUIRY

DATA COLLECTION

CREDIT SCORING

DATA VERIFICATION

LOAN SERVICING

COLLECTIONS & DEFAULTS

+ Referred to Website by: + Affiliates

Partners + Advertising

+ Borrower answers 6 basic questions to pre-qualify (90% fail)

+ Borrower completes detailed online questionnaire

+ Data collected from IRS database

+ Data collected from ADP and/or Paychex

+ Data collected from FICO providers

+ Lending Platform does manual credit verification as necessary

+ Lending Platforms utilize proprietary credit scoring models based on FICO and heuristic credit variables

+ Loan is Rated & Priced (APR)

+ Borrower provides requested physical data including W-2; tax returns; pay stubs

+ Lending Platforms perform manual and automated random data verifications

+ Serviced by originating Lending Platform

+ ACH Collections

+ Payment confirmation and reporting to investors

+ Cash paid to investor accounts

+ Lending Platforms actively call to collect in the 1st 30 days

+ 31 – 120 days past due collected by 3rd party collection firms

+ 120 day charge-off policy

+ Ongoing collection after default

LOAN ORIGINATED

+ DLF does independent credit analysis and portfolio optimization

+ DLF makes buy/pass decision

+ Institutional DVP

+ Loan and Note in separate SPV

STRONG INTERNAL CREDIT CRITERIA


Strong Risk Analysis & Credit Scoring Process

⁺ Minimum FICO Score

⁺ Absolute amount of income

⁺ Size of requested loan amount

⁺ Delinquencies and charge-offs

⁺ Utilization of aggregate credit limit

⁺ Size of revolving credit line

⁺ Job consistency

⁺ Type of employment / occupation

⁺ Employer

⁺ Length of credit history

⁺ Education

We evaluate over 4,000 loans per month

We look for:

• Ability to pay • Willingness to pay • Likelihood to pay

DIRECT LENDING FUND I, L.P.

Generating Monthly Cash Income

All statements made herein are confidential and made for informational purposes only. No offering of securities is being made hereby.

KEY INVESTOR BENEFITS


Monthly Income with very low risk to Principal ⁺ 9% - 11% interest income net of all fees and expenses

⁺ Low risk and Low volatility

⁺ Diversification with participation in thousands of Prime and Super Prime consumer loans

⁺ No leverage

⁺ 30 month average duration

⁺ Professional loan selection, portfolio management, & administration

⁺ Negotiated Lender Incentives paid to the Fund which enhance the Fund’s performance

Flexible Cash Distribution & Withdrawal Options

⁺ Reinvestment: Re-invest all monthly principal and interest income into new loans

⁺ Monthly Cash Distributions – Fixed Amount: Request a fixed monthly payment per month and reinvest the balance of your pro rata Net Cash Flow

⁺ Monthly Cash Distributions – Fixed Percentage: Request a monthly distribution calculated as a fixed percentage of your capital account and reinvest the balance

⁺ Monthly Cash Distributions – Percent of Income: Request a monthly distribution calculated as a fixed percentage of your monthly income (up to 100%) and reinvest the balance

⁺ Withdrawal: Request a monthly payment of all pro rata Net Cash Flow; Account pays out in no more than 36 months; The General Partner can accelerate these payments at its option

PROJECTED PERFORMANCE METRICS


Loan

Risk

Rating

Gross

Interest

Rate

Expected

Default

Rate

Loan

Servicing

Net

Return

%

Invested

Gross

Interest

Rate

Weighted

Default

Rate

Weighted

Loan

Servicing3

Projected

Annual

Return4

A 7.50% 1.25% 1.00% 5.25% 0% 0.00% 0.00% 0.00% 0.00%

B 11.75% 3.00% 1.00% 7.75% 5% 0.59% 0.15% 0.00% 0.44%

C 15.15% 4.40% 1.00% 9.75% 40% 6.06% 1.76% 0.00% 4.30%

D 18.25% 5.75% 1.00% 11.50% 45% 8.21% 2.59% 0.00% 5.63%

E 21.00% 7.25% 1.00% 12.75% 5% 1.05% 0.36% 0.00% 0.69%

F 22.75% 8.60% 1.00% 13.15% 3% 0.68% 0.26% 0.00% 0.42%

G 24.50% 9.50% 1.00% 14.00% 2% 0.49% 0.19% 0.00% 0.30%

100% 17.08% 5.31% 0.00% 11.77%

1 This example is for sample purposes only and the Fund's allocation among Risk Rating Segments will vary

2 Before direct expenses of the Fund, Management and Acquisition Fees

3 The General Partner has negotiated Lender Incentives with certain Lending Platforms that eliminate this fee

4 Estimated 9% - 11% annual return to investors after all fees and expenses

KEY PERFORMANCE METRICS PROJECTED PORTFOLIO PERFORMANCE2

BY LOAN RISK RATING SEGMENTS BASED ON ALLOCATION BY LOAN RISK RATING

EXPERIENCED TEAM


Howard Freedland CFA, CIO & Portfolio Manager

⁺ Previously CIO of F500 Advisory Services

⁺ Experienced Hedge Fund Manager

⁺ Experienced Executive

⁺ CEO of National Water & Power

⁺ CFO of GE Capital – ResCom

⁺ Managing Partner of Lido Capital

David Mickelson ChFC, CEO

⁺ Founder & Principal of Mickelson Capital Consulting and its affiliates

⁺ RIA since 1995

⁺ Accredited Estate Planner and Chartered Financial Consultant with over 20 years experience providing sophisticated wealth management services to ultra-high net worth individuals and family offices and their trusted advisors

Simon Leach, Chief Operations Officer

⁺ COO of Mickelson Capital Consulting and member of the Investment Policy Committee

⁺ Marketing Director of Office Depot’s Direct Business Division

Rochelle Werrett-Allen, VP-Compliance & Operations

⁺ Manager of Compliance for Mickelson Capital Consulting

⁺ Head of Insurance Operations

Elizabeth Jordan, Office Manager

⁺ Oversees office operations

FUND STRUCTURE


FUND STRUCTURE 3(c)(1) Delaware Limited Partnership

ASSETS SEC registered notes issued by specially formed trusts (“Notes”) secured with fully amortizing consumer loans with three & five year terms

STRATEGY Generate monthly cash income by investing in a highly diversified portfolio of Notes

DIVERSIFICATION Purchase a large number of Notes laddered by acquisition date with various characteristics such as risk categories based on likelihood of default, borrower characteristics, geographic location, and loan type

SUBSCRIPTIONS Monthly. $250,000 minimum investment

INVESTOR QUALIFICATIONS Each investor must be an “accredited investor” as defined by the SEC

WITHDRAWALS Monthly with 30 day advance notice. Since Notes are illiquid, withdrawals are treated as a separate Share Class and principal and interest are distributed as received. The Fund may purchase a withdrawing Partner’s Interest but is not obligated to do so

DISTRIBUTION SUB-CLASSES 1. Reinvestment: Investors may elect to reinvest principal and interest earned or; 2. Distribution: Investors may elect to receive (a) a fixed payment per month; or

(b) a percentage of their capital account

SUMMARY OF TERMS


NET ASSET VALUE NAV is calculated and reported on a tax (cash) basis. Each non-defaulted loan is carried at its currently amortized principal balance. Defaulted loans are written off immediately against the current month’s income

PARTNERSHIP EXPENSES Fund expenses including custodial expenses, third party administration, audit, tax and legal expenses are paid directly by the Fund

PURCHASER INDUCEMENTS The General Partner may negotiate purchaser inducements from loan platforms that originate Notes. All purchaser Inducements will be paid directly to the Fund

MANAGEMENT FEE 2% per annum paid monthly in arrears Negotiated rate for institutional investors, RIAs and FoHFs

LOAN ACQUISITION FEE .25% one-time fee of Notes acquired in the prior 4 months

PERFORMANCE FEE No performance fee

REPORTING Monthly electronic/paper statements provided by the Administrator

CUSTODIAN Millennium Trust Company

ADMINISTRATOR Opus Fund Services

AUDITOR Rothstein Kass

LEGAL COUNSEL Paul Hastings

Reputation Risk

+ Government is increasing regulation on a wide range of consumer lenders

+ Loan collection procedures are a key area of concern

Economic Risks

+ Limitations on maximum lending rates

+ Limitations on loan fees

+ Economy may worsen

+ Loan payments are influenced by the unemployment rate

Tax Risks

+ Tax rates on earned income may rise significantly

+ Tax rates on passive income may rise significantly

POTENTIAL RISKS


Please review the Direct Lending Fund I, L.P. placement memorandum for a more extensive discussion of potential risks

CONTACT INFO


Direct Lending Advisors, LLC 301 Mission Avenue, Suite 209 Oceanside, CA 92054 (760) 804-8050

David Mickelson – CEO [email protected] (760) 804-8056 - Office

Howard Freedland, CFA - CIO [email protected] (760) 804-8054 – Office (949) 813-5563 – Mobile Simon Leach [email protected] (760) 804-8050 – Office (760) 710-7679 – Mobile

DISCLOSURE AND CONFIDENTIALITY


Direct Lending Partners, LLC (“DLP”) and Direct Lending Advisors, LLC (“DLA”), both wholly-owned subsidiaries of

Mickelson Capital Consulting (“MCC”), serve as the General Partner and Adviser of the Direct Lending Fund, L.P.

and other associated investment vehicles discussed herein (the “Fund”). The Fund invests exclusively in consumer

loans originated through various online lending exchanges. Any grades or credit scoring attached to loans are

assigned by the lending exchanges.

The materials and information contained and described herein are proprietary to DLP, DLA, MCC, and the Fund

and may not be reproduced or distributed in any fashion without such parties’ written consent. These materials

do not constitute an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instrument or

participate in any particular trading or investment strategy and no representation or warranty is given with

respect to any future offer or sale. This information is not investment or tax advice or an investment

recommendation.

These materials have been prepared solely for informational purposes and are subject to change without notice.

The information contained herein is generally believed to be reliable but no representation or warranty is given

with respect to its accuracy or completeness. Investments may lose value over time and no return is guaranteed.

APPENDIX 1

Online Consumer Lending Exchanges


CURRENT LENDING PLATFORMS


Signature Consumer Loans

⁺ Launched lending platform June 2007

⁺ Began offering securitized SEC registered Notes with fractional interests 4Q08

⁺ 3 and 5 year loans

⁺ Loans originated to date: $564 million (as of 3/2012)

⁺ Monthly origination volume: $38 million (as of 3/20112

⁺ Investors include Foundation Capital, Morgathaler Ventures, Caanan Partners, Norwest Venture Partners, and the Thompson Family

Signature Consumer Loans

⁺ Launched lending platform November 2005

⁺ Began offering securitized SEC registered Notes with fractional interests 3Q09

⁺ 1, 3, and 5 year loans

⁺ Loans originated to date: $320million (as of 3/2012)

⁺ Monthly origination volume: $11 million (as of 3/2012)

⁺ Investors include Accel Partners ,Draper Fisher Jurvetson, Fidelity Ventures, and Compucredit

$1 BILLION IN CONSUMER TERM LOANS


Source: Peter Renton, Social Lending Network May 29, 2012

PEER TO PEER LENDING CROSSES $1 BILLION


Why Peer-to-Peer Lending is Becoming so Popular Both Lending Club and Prosper continue to see impressive growth as shown in this chart. What is behind this rapid growth?

1. Investors can earn double-digit returns After several years of low interest rates investors are actively seeking alternatives. Peer to peer lending offers returns in the 6-10% range and the possibility of even earning more than 10%. While there are risks most investors are earning far more at Lending Club and Prosper than they are in traditional fixed income investments.

2. Institutional investors are moving in Last year institutional investors started moving serious money into both Lending Club and Prosper. There is now over $100 million in institutional money invested at Lending Club and that number is growing all the time. Prosper has several large institutional investors including one who has invested close to $30 million and pledged another $120 million in coming years.

3. Consumers want to get out of credit card debt By far the most common type of loan on both Lending Club and Prosper is debt consolidation. People are trying to dig themselves out of credit card debt where rates can routinely climb north of 25% if a borrower misses a payment. Someone with decent credit can get a 36-month peer-to-peer loan at 12%, pay off their high interest credit cards and become free of credit card debt in three years. It is a win-win for the borrower and the investors who loan the money.

4. Banks are still not lending freely It is not news that bank credit remains tight. Personal loans are very difficult to obtain and the popular form of borrowing last decade – the home equity loan – was killed by the financial crisis. Small businesses are also feeling the pinch so business owners continue to look for alternative means of financing.

5. The industry is gaining credibility When one of the titans of Wall Street joins the board of a p2p lender, as John Mack (former CEO of Morgan Stanley) did recently at Lending Club, it provides a level of credibility that wasn’t there before. Prosper also announced this year that long time Goldman Sachs executive Eric Schwartz has joined their board. No longer could people write off p2p lending as a passing trend. Peer to peer lending is an idea whose time has come. Its rapid growth as it moves past $1 billion in originations reflects that. It provides advantages for both borrowers and lenders, more so now than ever before. Peer to peer lending is only just getting started so don’t be surprised if the $2 billion mark is crossed very quickly, probably within the next 12 months.

Source: Peter Renton, Social Lending Network May 29, 2012

LOOKING FOR 10% YIELDS?

GO ONLINE FOR PEER TO PEER LENDING CHRIS BARTH , FORBES STAFF


The following story appears in the June 25, 2012 Investment Guide issue of Forbes magazine.

Years ago clipping coupons from bonds was the province and passion of people in retirement. Today a tidal wave of aging boomers want income, but traditional sources are lacking. Ten-year Treasurys yield 1.6%. Safe-money bank CDs? 0.5%. Investment-grade corporate bonds are delivering 3.2%.

So coupon clippers are seeking alternatives. That’s why dividend stocks and annuities are all the rage. But there’s another neat source of high yield that relatively few consider. Peer-to-peer lending, or making personal loans via the Internet using websites like LendingClub.com and Prosper.com.

After six years of experience and some bumps, including a financial crisis and ensuing recession, peer-to-peer (P2P) lending has finally earned its place on an income investor’s menu. The basic premise of these bank disintermediaries is that they harness the networking power of the Web to match people who have excess cash with people in need of it or those who simply want to refinance credit card debt. The key to its success has been how the sites have managed the inherent riskiness of unsecured personal loans. Believe it or not, it is now possible to earn yields of 6% or more, making relatively safe loans to complete strangers.

Los Angeles financial advisor Brendan Ross committed $300,000 of his own money to Lending Club in early 2011. Based on his quarterly interest payments he claims he has accrued about $40,000 in income to date. Annual yield: 10.2%. “I’d been tracking the P2P space pretty much since inception,” Ross says. “I was waiting to feel like its loan underwriting model had matured.”

San Francisco’s Lending Club is the largest P2P lender, followed by its crosstown rival Prosper. There are also a host of microlending sites, but their loans are generally low-rate or non-interest-bearing, as they go to people in emerging economies. Lending Club and Prosper have loaned a total of more than $1 billion since inception, in 112,000 loans. Lending Club currently issues about $45 million in loans a month versus Prosper’s $13 million per month. Prosper ran afoul of the SEC in 2008 and temporarily shut down to revamp its risk-assessment model. At Lending Club, after a quick registration you can sort through hundreds of potential loans. Each loan has its own risk rating, term (either 36 or 60 months) and rate of return.

Loans with the highest rating—based on the borrower’s FICO score and some proprietary analysis—pay in the 5% to 9% range—about the same as junk bonds. Interest rates on riskier loans range as high as 31%. Both companies also offer diversified funds of aggregated loans and IRA options. Lending Club and Prosper vet thousands of loan applications, whittling down the pool to only those borrowers the company deems least likely to default.

Renaud Laplanche, cofounder and CEO of Lending Club. says his firm declines about 90% of all borrower applications, focusing on the 10% of borrowers with the best credit. Of course defaults happen. Lending Club’s top-rated three-year loans expect a default rate of around 1.4%, and the riskiest loans, offering rates as high as 25%, have a 9.8% default rate. By contrast junk bonds have an average default rate of 1.9%.

It’s prudent to opt for the pools of hundreds of P2P loans both sites offer. That’s how advisor Ross is earning 10%, despite a handful of defaults on direct loans he made. Indeed, Lending Club’s website prominently features the statistic that investors who have at least $20,000 spread over 800-plus loans have never lost a dollar of their initial capital.

John Mack, former chairman of Morgan Stanley, is a convert to P2P lending. After committing several million of his own capital to such loans, he joined Lending Club’s board in April. Says Mack: “Three-year Treasurys are about 40 basis points. Lending Club’s more conservative fund—three years, amortizing quarterly—is about 7%. Given where short-term rates are today, there’s a real opportunity here.”

APPENDIX 2

The Consumer Lending Market


CONSISTENT PROVEN PROFITABILITY


⁺ Banks have earned an average of 10.8% per year on average over the past 25 years (Source: Federal Reserve data; 1985 - 2010)

⁺ Estimate of 181 million credit card holders in the United States (58% of population)

⁺ Positive lending spread in 25 of 26 years throughout volatile economic and interest rate cycles.

⁺ Analysis does not include additional fees charged by banks

⁺ Banks keep majority of consumer loans on their balance sheets due to steady profitability

10.8%

15.5%

4.7%

10.8%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Interest Rate Charge-Off Net Spread

Federal Reserve Average Credit Card Net Return

HISTORICAL CONSUMER DEBT CHARGE-OFFS


+ 36 month average charge-offs are less volatile than nominal charge-offs + Investing over time further reduces charge-off risk

TRENDS IN CONSUMER CREDIT


Source: American Bankruptcy Institute. Data as of 11/11.

Source: US Bureau of Labor Statistics, 3/2012

And unemployment continues to show steady improvement

1. direct lending fund general fund presentation v2

Documents

unsecured consumer credit

duration risk

informational purposes

offering of securities

credit cards have6

tbills10 yr t

consumer loans8

yr30 yr t