2012 ANNUAL REPORT

For more than 20 years, Colorado Lend-ing Source has been helping small busi-nesses thrive. As the state’s leading not-for-profit lending expert, we provide the financing, education and support that small businesses need to succeed.

EXECUTIVE LETTERDear Reader,

This annual report commemorates the conclusion of the 22nd year in the histo-ry of Colorado Lending Source.

This past year, 2012, was the busiest ever for Colorado Lending Source from sev-eral different perspectives. We developed a forward looking ten-year strategic plan and consolidated our position as the last remaining PCLP (Premier Certified Lenders Program) lender in the nation. Colorado began to finally emerge from the throes of the great recession, provid-ing expanded opportunities for Colora-do Lending Source to assist community lenders with the processing of SBA 7(a) loans, and offer more new loans under our direct loan program, Colorado Main Street Loans.

One remarkable statistic that leaps out from 2012, however, was that although Colorado Lending Source was involved with many more projects in 2012 than in 2011, involving a significantly larger dollar amount of investment in the state of Colorado, the anticipated job creation and retention numbers for our clients in 2012, although still significant, was lower than in the previous year.

But rather than this being a negative thing, we see it as a positive step in a less than normal economy, where uncertain-ty continues to be the order of the day. Small businesses in Colorado finally seem to be gearing-up and re-investing in this state in anticipation of future employ-ment growth needs.

The Colorado Lending Source achieve-ment statistics for 2012 are nevertheless impressive. We assisted 281 small busi-nesses secure 195 SBA 504 loans, 78 SBA 7(a) loans and 8 Colorado Main

Street loans. These 281 small businesses anticipate adding or retaining 2013 jobs over the next two years, an average of 7.2 jobs per project.

And when you add up the dollar value of the loans these 281 small businesses secured, together with the amount small businesses directly invested, the grand total is an outstanding $382.3 million worth of investment in the state. This to-tal represents a 68% increase over 2011 as well. A phenomenal increase! Of course, we couldn’t have done any of this without our partnership with the 64 different lenders and the 160 differ-ent loan officers we worked with during 2012. Thank you, everyone!

The staff of Colorado Lending Source is the most remarkable group of people you could ever assemble too, and they do a superb job helping the organization achieve its mission of fostering the eco-nomic growth of diverse small businesses in our community.

Thank you too to the entire membership and the board for their support of Colo-rado Lending Source in 2012 as well. The organization would not exist without you either.

Thank you for a great 2012! Let’s see what 2013 will bring!!

Respectfully,

Mike O’Donnell

Mike O’DonnellExecutive Director

Geoff Wright, FirstBankBoard President

ORGANIZATION OVERVIEW

COMMERCIAL REAL ESTATE & CAPITAL EQUIPMENT LOANSSmall Business Administration 504 loans from $25,000 to $5.5 million provide small businesses with financing to build, buy or renovate commercial real estate and purchase machinery or capital equipment. Colorado Lending Source partners with banks to pro-vide these loans to Colorado’s small businesses.

GENERAL BUSINESS LOANSSmall Business Administration 7(a) loans are available to small businesses through banks. Financing ranges from $25,000 to $5 million and can be used for a va-riety of business needs including purchasing another small business, working capital and refinancing debt. Colorado Lending Source offers lender assistance to banks providing these loans. COLORADO MAIN STREET LOANSColorado Main Street Loans is a direct micro-loan from Colorado Lending Source in partnership with the United States Department of Agriculture-Rural Development (USDA). Financing from $10,000 to $35,000 is available for non-agricultural small busi-nesses in rural Northeastern Colorado for commercial real estate, equipment or business purchases, debt refi-nancing and working capital.

ICE HOUSE ENTREPRENEURSHIP PROGRAMThe Ice House Entrepreneurship Program in part-nership with the Ewing Marion Kauffman Founda-tion is a 10-week program designed to provide adult students with the framework for understanding and

implementing an entrepreneurial mindset. Colorado Lending Source offers this program at our Denver of-fice three times a year.

BOARD OF DIRECTORSExecutive Committee:Board PresidentGeoff Wright, FirstBankBoard Vice PresidentDoris Rigoni, First National Bank of Santa FeBoard TreasurerDave Otteson, BBVA Compass BankBoard SecretaryBryan Blakely, Accelerate Colorado Past Board PresidentBrian Burke, Community Reinvestment Fund

Board Members:Jenae Anderson, Vectra BankFrank Gray, Castle Rock Economic Development CorporationMichelle Hadwiger, Office of Economic Develop-ment & International TradeStacy Johnson, Town of WindsorNiall Mooney, Commerce Bank, N.A.Nanette Neelan, City of LakewoodJim Ocken, Citywide BanksMicheal Paul, Edward Jones, Envisage Financing, Ltd.Corri Spiegel, City of Centennial

Honorary Member:Rudy Bianchi

LOAN REVIEW COMMITTEES504 Loans:Kevin Armitage, Colorado Business Bank

Our mission is to foster the economic growth of diverse small businesses within our communities.

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Back Row: Joah Flood, Michala Markovich, Brett Harrison, Dianne Ariki, Barbara Taylor, Karen McDevitt, Laurel Walk, Marie Peters, Danielle Bosher, Briana Rickertsen, Middle Row: Diane Rhodes, Lacey Cale, China Califf, Mike O’Donnell, Emily Przekwas, Lauren Kloock, Cindy Scheich, Sean Avery, Helen Pile, Alissa Frohreich, Sara Beyer, Alex Grina, Beth Hurley, Tod Cecil, Amber Cornwell, Aman-da Peterson, Stacey Williams, Front Row: Linda Hogan, Jessica Stutz, Karol Jones, Rachel Russell, Lindsey Eilbacher, Nicole Christianson

Suzanne Bastin, Guaranty BankRick Bruno, FirstBankJustin Carter, Core First Bank & TrustDawn Davis, FirstBankAlex Dempster, CHFAGreg Dixon, First National Bank of the RockiesJessica Erickson, City of ThorntonAaron Fanaff, Capital Source BankTodd Guymon, Fort Collins Commerce BankRon Harlow, Harlow CapitalChad Hirschfield, Cassidy Turley Fuller Real EstateMandy Kuxhausen, T BankTony LeVeque, Central Bank & TrustRandi Lowenthal, Roaring Fork Business Resource CenterTerry Osborne, First State Bank of ColoradoLorna Reeves, Cache Bank & TrustYolanda Russell, UMB Bank

Colorado Main Street Loans:Erin Beckstein, Adams County Economic Develop-mentEric Gricus, Boulder Innovation CenterLucas Harmon, US BankDerek Hemmer, First National Bank of MonumentRon Munyan, The Eastern Colorado BankLinda Olsen, Morgan Community CollegeRoxanne Sanchez, Capital SourceDarlene Scott, EAGLE-Net AllianceBill Unrein, Advantage BankStan Wood, ProLogic Capital

STAFF

www.coloradolendingsource.org

LENDINGOVERVIEW

Loan Program Loans Approved

Jobs Created & Retained

Total Project Cost

504 Loans 137 1029 $222,963,377.82

504 Loans [PCLP]* 27 147 $21,592,924.96

504 Refinance** 30 393 $75,649,490.00

504 Expansion Refinance** 1 20 $3,116,416.00

Total 504 Loans 195 1589 $323,322,208.78

7(a) Loans 52 157 $46,126,394.40

7(a) Loans-Preferred Lender Program 4 76 $2,119,250.00

7(a) Loans-Small Loan Advantage 6 41 $1,180,000.00

7(a) Loans-CAPLines 7 27 $6,715,000.00

7(a) Loans-Express 9 83 $1,832,700.00

Total 7(a) Loans 78 384 $57,973,344.40

Colorado Main Street Loans-SBA 6 36 $954,144.00

Colorado Mains Street Loans-USDA-RD 2 4 $63,650.00

Total Colorado Main Street Loans 8 40 $1,017,794.00

TOTAL ALL PROGRAMS 281 2013 $382,313,347.18

In 2012 we approved 281 loans, which led to the creation and retention of 2013 jobs in Colorado,

*Colorado Lending Source is certified under the U.S. Small Business Administration’s (SBA) Premier Certified Lenders Program, which gives us the authority to approve strong loans with less oversight from the SBA. We are currently the only active PCLP lender in the country.**The 504 Refinance Loan Program was a temporary program that expired in September of 2012. The 504 Expansion Refinance Loan Program is a permanent program that allows for a certain amount of conventional commercial real estate or equipment refinance, if the business is expanding.

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Adams Bank & Trust Advantage Bank Alpine Bank AmFirst Bank, N.A.ANB Bank Bank of Colorado Bank of the WestCapital West Bank Celtic Bank Centennial BankCentral Bank & Trust Champion Bank Citywide BanksCollegiate Peaks Bank Colorado Business Bank Colorado East Bank & Trust Commerce Bank, N.A. Community Banks of Colorado CoreFirst Bank & Trust Crested Butte Bank ENT Federal Credit UnionFarmers Bank

FirstBankFirst Business Bank First Colorado National Bank First National Bank First National Bank of Estes Park First Southwest Bank First State Bank of Colorado Flatirons Bank FMS Bank Front Range Bank Great Western BankGuaranty Bank and Trust Company Herring Bank High Country Bank Home State BankIntegrity Bank & Trust International Bank IronStone Bank JP Morgan Chase, N.A.KeyBank, N.A.Kiowa County National Bank Legacy Bank

Metro City Bank Millennium Bank Mountain View Bank of Commerce New West Bank Pacific Continental Bank Public Service Credit Union Rock Canyon Bank Rocky Mountain Bank & Trust Security Service Federal Credit Union Solera National Bank Steele Street Bank & Trust T Bank N.A. The Eastern Colorado Bank UMB Bank Colorado, N.A. US Bank, N.A.Valley Bank & Trust Vectra Bank Verus Bank of CommerceWells Fargo National Association Yampa Valley Bank

and partnered with 160 loan officers at 64 lending institutions.

504 Loans

7(a) Loans

Colorado Main Street Loans

Loan Approvals

69%

28%

3%

www.coloradolendingsource.org

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JOBS Created & Retained

Outdoor equipment man-ufacturer, Big Agnes, is well known and regard-

ed by outdoor adventurists across the globe. Owners Bill Gamber, Richard Hager and Len Zanni take inspiration when creating their products, including sleep-ing bags, tents and sleeping pads, from the wilderness that surrounds them in Steamboat Springs. They even have a line of products made from recycled materials that uti-lizes environmentally sensitive manufacturing processes named Re-Routt after their home coun-ty of Routt. Big Agnes has re-

ceived numerous awards and ac-colades for their products from publications such as Backpacker, Outside, Rock and Ice, National Geographic Adventure and Men’s Journal.

Their passion for what they do has translated into steady growth of the business, and with growth comes the need for more phys-ical space. Utilizing

financing provided by Colora-do Lending Source through the Small Business Administration’s 504 loan program, Big Agnes expanded their operations to in-clude an additional 7,500 square feet of commercial real estate.

FINANCING DETAILS

Commercial Real Estate Purchase [504]

$585K

PARTNER LENDER

Vectra Bank

JOBS CREATED

5

BIG AGNES

8

Commercial Real Estate Loans

CITY O’ CITY

FINANCING DETAILS

Commercial Real Estate Purchase & Renovation [504]

$2MM

PARTNER LENDER

FirstBank

JOBS CREATED

20

City O’ City is a lively veg-etarian restaurant and bar located in Denver’s Capitol

Hill neighborhood. Owner Dan-iel Landes is a natural at creating open environments for people to gather and enjoy a delicious meal over stimulating conversation with friends and strangers. You can stop in day or night for a cup of Pablo’s Coffee and one of City O’ City’s delectable baked goods, or a tan-talizing cocktail and meal that will have you asking yourself when you can come back for more.

After purchasing the building that is home to City O’ City, Daniel started a renovation project that transformed the beloved restaurant into an open, light filled adven-ture for the senses. The building

also houses a second story filled with art studios. Colorado Lend-ing Source worked with Daniel on this, his second (he also owns Wa-terCourse Foods in Uptown) Small Business Administration 504 loan to finance the real estate purchase and improvements.

www.coloradolendingsource.org

MARCZYK FINE FOODS

Marczyk brothers Pe-ter and Paul, are the grocers of the twen-

ty-first century. At Marczyk Fine Foods you will find ev-erything you need to make a delicious meal at home using only the very best local in-gredients. From their freshly baked specialty breads and organic produce to the high-est quality meats and sea-food, the shop is a feast for the eyes and will have your stomach growling. If cooking isn’t your thing, not to worry, the deli can quickly assemble a delicious sandwich, or you can choose from one of their many meals-to-go options. Looking for a nice glass of wine to accompany that sea-sonal cheese you picked up? Marczyk’s has an 875 square foot Fairfax Wine and Spirits shop next door where you’ll

find great prices and a variety to choose from. The only is-sue you’ll run into at Marczyk Fine Foods is deciding what to actually buy!

Peter Marczyk and his wife Barbara Macfarlane received a Small Business Administra-tion 504 loan from Colorado Lending Source for the com-mercial real estate purchase and renovation of what is now Marczyk Fine Foods second Denver location.

FINANCING DETAILS

Commercial Real Estate Purchase & Renovation [504]

$2.1MM

PARTNER LENDER

Great Western Bank

JOBS CREATED

35

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Commercial Real Estate Loans

Boulder Colorado’s Pearl Street Mall is well known as a culinary mecca, and neighborhood restau-rant The Kitchen has established itself as one of Boulder’s most notable eateries. With, now, four restaurants, The Kitchen, The Kitchen [Upstairs], The Kitchen [Next Door] and The Kitchen

Denver, owners Hugo Matheson and Kimbal Musk have created a community of passionate foodies hun-gry for their seasonal menus featuring farm-to-table ingredients. Each location has something different to offer, be it bistro, lounge, or pub with varying menus ringing true to The Kitchen’s distinct flavors and atmosphere.

Their mission to “create community through food” took Hugo and Kimbal out of the kitchen and into schools, with their nonprofit The Kitchen [Community], which teaches children about “real food” and utilizes a portion of the restaurants’ profits to plant learning gardens.

Colorado Lending Source provided financing through the Small Business Administration 504 loan pro-gram for the purchase of the commercial space now known as The Kitchen [Next Door].

FINANCING DETAILS

Commercial Real Estate Purchase & Renovation [504]

$1.9MM

PARTNER LENDER

First National Bank

JOBS CREATED

43

THE KITCHEN [NEXT DOOR]

www.coloradolendingsource.org

Advanced Animal Care of Colorado is a pet owners dream come true. In addition to general practice care, this full-ser-vice, small animal hospital located in Fort Collins, Colorado

offers reproductive medicine, surgical services, behavioral medicine, diagnostic imaging, hospice, nutritional counseling, pain manage-ment and senior care. They have specialized rehabilitation services including Hydrotherapy with an underwater treadmill, acupunc-ture, chiropractic services and massage care. Plus, their Dog Tails Activity Center provides the ulti-mate doggy day care, obedience classes, grooming, agility training, luxury lodging and swimming also known as “splash time.” This tru-ly is a place where the four-legged members of your family can receive the royal treatment!

With financing through the Small Business Administration 504 and 7(a) loan programs, Colorado Lending Source helped Dr. Steyn open this 8,177 square foot, state-of-the-art veterinary facility.

ADVANCED ANIMAL CARE OF COLORADO

FINANCING DETAILS

Commercial Real Estate Purchase & Renovation [504] plus Working Capital [7(a)]

$2.3MM

PARTNER LENDER

FirstBank

JOBS CREATED

30

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Need a break from the bumper-to-bumper traffic of your daily commute? At Unser Racing, Metro Denver’s largest indoor rac-

ing facility, you can make a pit stop for some high-speed drive time. No need to make a reservation, drivers of all levels can “Arrive and Drive” in one of 84 daily heats for racing fun anytime or join one of their racing leagues and make it a regular thing.

Owners Scott Sutton and Johnny Unser created this ultimate entertainment facility by renovating a for-mer car dealership to include a new entrance and training room, an indoor radio controlled off road

track, conference space for corporate clients, a game room complete with mini bowling lanes and tour-nament pool tables, and new track view-ing area with a full service bar. Colorado Lending Source as-sisted Public Service Credit Union with the Small Business Administration 7(a) loan used to finance these renovations.

UNSER RACING

FINANCING DETAILS

Commercial Real Estate Renovation [7(a)]

$700K

PARTNER LENDER

Public Service Credit Union

JOBS CREATED

5

www.coloradolendingsource.org

General Business Loans

Growers Organic is a wholesale distributor of organic produce for local restaurants, grocery stores and home delivery services. The business is run by owner Brian Freeman and a dedicated staff that is commit-ted to providing customers “with an intimate link to the farmers who harvest the food you eat and share with others.” They have developed relationships with Colorado’s farmers and studied the way they run their farms. Growers Organic is certified under the U.S. Department of Agriculture’s National Organic Program, and adheres to sustainable business practices (including recycling 75% of their post-consumer waste), all with the intention of providing you with easy access to fresh organic produce.

The increasing demand for organic foods has kept Brian on the tips of his toes for the last seven years. In need of additional cooler space to store his constant supply of produce, he applied for and was one of the first re-cipients to receive, financing through our direct loan program, Colorado Main Street Loans. The funds were used to build and install a new walk-in produce cooler that allowed him to double his inventory.

Colorado Main Street Loans

FINANCING DETAILS

Equipment Purchase & Installation [Colorado Main

Street Loans]

$200K

JOBS CREATED

55

GROWERS ORGANIC

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For more information about Colorado Lending Source please visit our website at www.coloradolendingsource.org.

DENVER518 17th Street, 18th FloorDenver, CO 80202Toll Free: 877.852.6799E-mail: info@clsloans.org

GLENWOOD SPRINGS2520 South Grand Avenue, Suite 207Glenwood Springs, CO 81601Phone: 970.947.1400

www.coloradolendingsource.org