PRO LeaseAn Effective Commercial Finance Solution

for Renewable Energy Projects

Discussion Points PRO Lease Applicability Cash Flow Qualifying Funding Process Increasing Sales Discussion

Viable

EffectivePre-Funded

PRO Lease“Purchase Renewal Option”

Tax/True Lease or Operating Lease “off-balance sheet” reporting

Funder owns the equipmentInvestment tax credit (ITC) and depreciation taken to reduce pricingLessee, the equipment user, makes rental payments to the Lessor, the funderpayments recorded as a business expense

$50,000, 60 mos.; $100,000 and up, 84 mos. Purchase Option >> Residual or Fair Market Value (20%) whichever is greater

Tax treatment isstraight-forwardand clear

PRO Lease (cont’d.)

100% FinancingNo down paymentEnhanced cash flowFast qualifying

ITC cost reduction is assuredBank lines preservedOwner equity is preservedSales increase

Whatare the benefitsof a PRO Lease?

ApplicabilityDepreciable, personal property used for business purposes onlyITC is equal to 30% of expenditures with no maximum credit:

SolarFuel CellsSmall Wind Turbines

Commercial, Industrial, Utility, AgriculturalNew and used equipment

It’s not justfor solar panels

Input:Cost of Equipment Solution 500,000.00$ Assumed Tax Bracket 35%Today’s bank rate for equipment 5.00%Lease Factor - Provided by Vendor 0.005965Tax/True Lease with a residual of 20% 20% 100,000.00$ Length of agreement in months 84Down payment required by the bank as a percent 20%Depreciation Expense SL, 5 YearsSalvage Value 100,000.00$

Cost Calculation: Pro Lease LoanCost of Equipment Solution 500,000.00$ 500,000.00$ Bank Loan Down Payment 100,000.00$ Net Financed Amount; subtract line 2 from line 1: 500,000.00$ 400,000.00$ Payment (2,982.50)$ (5,653.56)$ Interest Cost (74,899.34)$ Sum, Stream of Payments (250,530.00)$ (474,899.34)$ Total Cost Before Tax Reductions 350,530.00$ 574,899.34$ Cost Reductions:Investment Tax Credit (if owner can qualify) 150,000.00$ Depreciation Basis Reduction if ITC is taken 75,000.00$ Tax benefit: Business Expense Deduction - Interest 26,214.77$ Tax benefit: Business Expense Deduction - Residual 35,000.00$ Tax benefit: Business Expense Deduction - Tax/True 87,685.50$ 148,750.00$ Net Cost 227,844.50$ 249,934.57$ Difference in Net Cost (22,090.07)$

Prepared For: Any Company that can Qualify

Cash FlowCash flow year 5Payments (35,790.00)$ (67,842.76)$ Tax benefit of Depreciation 29,750.00$ Tax benefit of Interest Expense 3,744.97$ Tax benefit of Lease Payments 12,526.50$

(23,263.50)$ (34,347.80)$ Cash flow year 6Payments (35,790.00)$ (67,842.76)$ Tax benefit of Depreciation -$ Tax benefit of Interest Expense 3,744.97$ Tax benefit of Lease Payments 12,526.50$

(23,263.50)$ (64,097.80)$ Cash flow year 7Payments (35,790.00)$ (67,842.76)$ Residual (100,000.00)$ Tax benefit of Depreciation -$ Tax benefit of Interest Expense 3,744.97$ Tax benefit of Lease Payments 12,526.50$

(123,263.50)$ (64,097.80)$ Cash flow year 8 - 12Tax benefit of Depreciation for Residual 35,000.00$

Total (227,844.50)$ (249,934.57)$

Qualifying650 or higher FICO score for closely held corporations, LLCs and partnershipsCredit ApplicationVendor invoice or quoteBank Statements for the most current 3 monthsOverview of the company; history, operations, ownership and management

How does yourprospect qualifyfor financing?

Qualifying (cont’d.)

Fiscal year-end Financial Statements for 2011, 2012 & 2013 (3 years of financials are required)Interim Profit and Loss/Income Statement and Balance Sheet (not older than 90 days)Credit reports on the vendor owners where applicableThe lender may also request financial statements on the vendor to finalize approval

How does yourprospect qualifyfor financing?

Funding ProcessVendor approval requiredAdvance Commitment Addendum (ACA)

Vendor offered 50% prefunding to order equipment 40% milestone payment made when the install is completedfinal 10% payment is made upon full completion

When power connected to the utility companyLessee acknowledges and approves the work for payment.

Vendor invoice must be designated as follows:Sold To: LenderShip To: Lessee (your customer or end user)

It’s not justfor solar panels

Increasing SalesAdd financing message to commercial collateral

Proposals reflect monthly payment pricing

Promote financing through sales executionTrain sales teams to promote “payments”

Support sales and marketing at industry conferencesSupport financing through websiteAstrum Solar “private label”

How does yourprospect qualifyfor financing?

Thank You!