Dearborn Capital Corporation

Procedures for Obtaining Financial Assistance

Supplier Certification - Suppliers requesting financial assistance must be certified by a regional council of the National Minority Supplier Development Council (NMSDC). The certification process, which identifies who owns, operates and controls the company, seeks to verify that each company requesting assistance complies with the intent of Ford's Minority Supplier Development Program

Investment Screening Guidelines - Because DCC is licensed and regulated as an SSBIC by the SBA, it must adhere to a few qualifying guidelines. The SBA requires that any company receiving assistance must be owned, controlled and managed by socially or economically disadvantaged individuals.

SBA's definition of small business:

Not dominant in its field of operation
Tangible Net Worth less than $18 million
Average annual net income, after Federal income taxes
for the preceding two completed fiscal years, of less
than $6 million

The SBA requires that loans be long-term capital assistance. DCC focuses on financing long-term assets.

In addition to the guidelines specified by the SBA, DCC has established supplemental criteria for evaluating loan requests. To meet these criteria, the applicant company should:

Be a Tier I or Tier II supplier to Ford
Be sponsored by a Ford Supplier Development Council
Have a long-term financing need of $500,000 or more
Have 3 years of CPA-prepared financial statements
Have a business plan.

Council Sponsorship - Sponsorship is the Supplier Development Council's commitment to provide the support necessary to create a long-term viable minority supplier which, within five years, will be financially self-sufficient. Sponsorship includes, if necessary, engineering, manufacturing, accounting, quality control, purchasing and general management assistance, and requires a business/technical assistance plan.

Financial Analysis - After it has been determined that the supplier has attained minority certification and has received a sponsorship commitment, DCC begins to analyze the financial assistance request from a credit viewpoint. The analysis keys on management; historical operating results; projected operating results; accounting, information and control systems; and capital structure.

Recommendation to Investment Committee - Based upon sponsorship assistance to be provided and financial analysis, a recommendation is made to DCC's Investment Committee which is responsible for deciding if the requested financial assistance will be approved. DCC requires its customers to have adequate bank financing in place in the form of a working capital line of credit. The SBA requires that SSBIC's attempt to ensure the maximum participation of private financing sources.

Implementation and Follow Through - Assuming approval by DCC's Investment Committee, we begin to prepare loan documents. After the funds are disbursed, we work closely with the Ford sponsor in development of the minority business enterprise.

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