Investor Presentation

Investor Presentation

For information purposes only. Offering via Private Placement Memorandum

Princeton Alternative Income Fund

Princeton Alternative Income Fund (PAIF), in exclusive corporate partnership with MicroBilt Corporation, seeks to deliver high risk-adjusted returns in the alternative lending market.

PAIF is an open-end L.P.


Business Opportunity

One third of US consumers have a FICO score under 670. Most traditional lenders would not offer loans to individuals below that level, despite the fact that these consumers generate approximately $4.0 trillion of the $15.2 trillion personal income produced annually in the U.S.1 Further, 56 percent of US consumers have non-prime credit scores (below 640) while 45 million Americans are living without a credit score altogether.2 Utilizing the power of MicroBilt’s historical lender and consumer database and analytics, PAIF is able to target the highest quality finance companies and their customers to provide credit lines on short-term, non-prime consumer loans with accurate and predictive results. The total size of the U.S. Consumer Credit market is $901 billion.3 The Non-Prime U.S. Consumer Revolving Credit market is in excess $100 billion. PAIF Fund Capacity is estimated at $3 billion. 1U.S.

Department of Commerce BEA (Bureau of Economic Analysis) for Enterprise Development (CFED) 3Board of Governors of the Federal Reserve System

2Corporation


US Consumer Credit Market

(EOP, SA, $Bil.)

2008

2009

2010

2011

2012

2013

2014

Q1.15

Q2.15

Total Outstanding

$2,650.6

$2,552.8

$2,647.4

$2,755.9

$2,923.6

$3,097.9

$3,317.2

$3,363.5

$3,422.1

Revolving

$1,004.7

$916.8

$840.0

$841.7

$846.7

$857.6

$890.0

$890.9

$906.5

Nonrevolving

$1,645.9

$1,636.1

$1,807.4

$1,914.2

$2,076.9

$2,240.3

$2,427.2

$2,472.6

$2,515.6

EOP = end of period, SA = seasonally adjusted

Notes: Consumer credit covers most short - and intermediate-term credit extended to individuals. It includes revolving credit (credit card credit and balances outstanding on unsecured revolving lines of credit) and nonrevolving credit (such as secured and unsecured credit for automobiles, mobile homes, trailers, durable goods, vacations, and other purposes). Consumer credit excludes loans secured by real estate (such as mortgage loans, home equity loans, and home equity lines of credit).


Our Edge

Princeton Alternative Funding, in partnership with MicroBilt, has created an ecosystem to transform the non-prime lending market, making credit more attainable

and

affordable

to underbanked,

non-prime

consumers

and

generating more predictable and rewarding returns for investors. PAF sources funds and monitors, in real-time the best credits from MicroBilt’s database of non-prime consumers and lenders using MicroBilt’s: •

Upfront analysis of lender operating guidelines/best practices/credit criteria

•

Historical consumer, lender, vertical and geographic database metrics

•

Live, real-time daily data feeds directly from the client loan management systems of 4,000+ lender clients


The Alternative Credit Bureau

•

The leading credit analysis and risk management company in the alternative consumer market for more than 35 years, with more than 4,000+ active lenders and three times more alternative consumer data than the big three consumer credit bureaus combined.

•

MicroBilt offers small to mid-sized business owners cost effective solutions for fraud prevention, consumer financing and debt handling.

•

MicroBilt is an CRA (Consumer Reporting Agency), regulated by the CFPB and operates under the FCRA.

•

Security compliant with PCI DSS 3.0 and SSAE SOC Type II.

www.microbilt.com


Proprietary Loan Data - Client Default Rate History from 2007 In addition to Princeton Alternative Funding’s real-time data feeds from loan management systems, PAF also utilizes the live big data reporting feeds from MicroBilt’s subscriber base to anticipate existing/potential inflection points in the overall non-prime market, example below.* Year

Inquiries

Total Loans Reported

Bad Loans Reported

2007 2008 2009 2010 2011 2012 2013 2014

16,751,779 15,549,704 14,403,544 15,813,321 13,692,801 12,660,833 8,172,734 4,661,903

3,366,469 2,883,200 4,003,279 4,522,598 4,212,187 4,710,319 3,138,634 2,300,904

557,708 365,500 504,411 587,866 714,571 753,660 464,597 248,112

Default Rate 16.57% 12.68% 12.60% 13.00% 16.96% 16.00% 14.80% 10.78%

*Effects of Operation Choke Point, initiated by the U.S. Department of Justice in August, 2013 to target suspected fraud and money laundering operations, resulting in the elimination of many payday lenders and payment processors. Consequently, credit inquiries were down 63% in 2014 vs 2012, while credit quality improved, with bad loans falling 67% vis-à-vis a drop of 51% in total loans.

MicroBilt saw these finance companies and processors go out of business in realtime, indicating a healthy improvement in overall future non-prime loan quality.


PAIF Business Overview

Investors Investment Capital

MicroBilt

Consumer Credit Score

Princeton Alternative Income Fund Drawdown Approved

Drawdown Request Credit Score

Finance Company

Credit Check

Loan Funded

Loan Request

Consumer


Flow of Funds

(6) Monthly Interest Distribution

Investors (5) Funds dispersed monthly from Interest Account

(1) Drawdown Approval

Interest Payment on LOC (20-22%)

(4) ACH Loan Repayment

(5) PAIF Interest Account

Interest

15% of Paid Interest

Finance Company Loan Loss Reserve

(6) Investor Interest Reinvested

Princeton Alternative Income Fund

Consumer

(4) ACH Loan Repayment Principal

PAIF Line of Credit

(3) Loan to Consumer

Balance of Interest

Finance Company


(2) Funds Released

Projected Returns

Line of Credit interest terms to Finance Co. Participation Fee (Annual Renewal Fee – 2% beginning year two)

Drag (assumes 95% of funds dispersed in Loans)

21.00% +1.80%

22.80%

-1.09%

21.71%

Gross Return

21.71%

Fund Expenses

-1.00%

20.71%

Management Fee

-2.00%

18.71%

Performance Fee (.2 x 17.71%)

-3.54%

15.17%

Projected Returns: 13% - 15% net of fees


Management Walt Wojciechowski

Walt is the Director of PAF and is the CEO and President of MicroBilt Corporation. With over 30 years’ experience in consumer/ commercial audit, loan origination, risk mitigation and business solution strategies, Walt has performed the roles of CEO, COO and CFO at the largest TRW/Experian affiliate and served as SVP at one of Experian’s U.S. consumer services divisions. Walt’s customer focus has led him to identify and structure key industry alliances, accelerating MicroBilt’s market expansion. He is a current Board Member of the CDIA (Consumer Data Industry Association) and has been elected to multiple terms. Walt holds a B.S. in Accounting from LaSalle University.

Alonzo Primus Alonzo is the Chief Credit Officer, Managing Partner and a Certified Public Accountant with over 20 years’ experience in financial services. Alonzo has worked closely with both privately held and publicly traded financial services providers to deliver products and services to the underbanked and unbanked markets, including clients such as Compucredit Corp., CNG Financial Inc., among others. In addition to his background in developing loan underwriting policy and procedures, he has extensive knowledge of risk analytics as well as reporting and monitoring tools for all phases of non-prime lending. Alonzo has a M.B.A. from Temple University, as well as a B.S. in Accounting and Finance from Drexel University.

Robert B. Wade

Rob brings over 25 years’ experience working with domestic and global fixed income trading institutions. As head of International Fixed Income at MKI Securities, he led the strategic consolidation of the Canadian, Sovereign, and World Bank USD debt products to one unit, integrating the New York and London trading operations. At BondNet Trading Systems, Rob utilized his global institutional relationships, scaling the firm’s fixed income spread trading technology prior to its acquisition by Bank of New York Mellon. Before joining Princeton Alternative, Rob pursued activities in precious metals.

Sean M. Albert

Sean Albert is the Chief Marketing Officer. Mr. Albert formerly served as CBDO for Battalion Capital, a private energy fund and the brokerage firm, Liquidity Energy. Prior to these companies he managed the venture capital and private equity firm of WH Holdings as Vice President, where he oversaw multiple acquisitions and financing transactions. Mr. Albert was also the CEO of Icon Design Group, a nationally recognized marketing firm, CFO & President for G&G Properties and worked in advertising for NBC Universal. Mr. Albert is a graduate from Colorado State University and is involved with multiple charitable organizations. For information purposes only. Offering via Private Placement Memorandum

Advisory Board

Dr. Pat Nanda Dr. Nanda is the head of Analytics at MicroBilt. He directs his activities to client studies, scorecard development and default reduction strategies. Pat has been dealing with alternative data sources in the development of credit evaluation systems for the last 25 years and has been credited with building default prediction models in third world countries, including the Philippines and Malaysia. Pat graduated from The University of Wisconsin - Madison, Doctor of Philosophy (PhD) statistics.


Service Providers

Cole-Frieman & Mallon LLP One Sansome Street, Suite 1895 San Francisco, CA 94104

Bank of America 505 White Plains RD. Tarrytown, New York 10591

Liggett & Webb P.A. 432 Park Avenue South, 10th Floor New York, New York 10016

Bedell Cristin Mandar House, Johnson's Ghut, PO Box 2283, Road Town Tortola British Virgin Islands VG1110

Fund Administration 4175 Veterans Memorial Hwy, Suite204 Ronkonkoma, New York 11779

Millennium Trust Company 2001 Spring Road, Suite 700 Oak Brook, IL 60523


Fund Details

Founded for the purpose of funding finance companies making short term, non-prime consumer loans while achieving superior riskadjusted returns through a partnership with MicroBilt, the industry leader in risk management and alternative consumer credit.

Minimum Investment

$1,000,000

Interest

Paid monthly or reinvested

Redemptions

Monthly with 180 day advanced notice

Domiciled

US

Offshore

BVI

Management Fee

2%

Performance Fee

20%

Targeted return

13% - 15% annual, net of fees Fund Capacity – estimated USD $3B


Contact Information

[email protected] (800) 261-7660 www.princetonalternativefunding.com 100 Canal Pointe Blvd. Suite 208 Princeton, NJ 08540


Disclaimer

This publication and the information provided within to readers and registrants (the “users”) has been issued by Princeton Alternative Funding, LLC. (PAF). It has been prepared solely for informational purposes and should not be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any transaction or trading activity. The contents are based upon or derived from information generally believed to be reliable although no representation is made that it is accurate or complete and PAF accepts no liability with regard to the user’s reliance on it. The information contained herein is a summary of any transaction described and is incomplete and provided for the convenience of the user and is subject to change without notice. This publication and the information contained herein is not intended to be a source of advice or credit analysis with respect to the material presented, and the information and/or documents contained in this publication do not constitute investment advice. Accordingly, any decision in connection with funds, instruments or transactions described or mentioned herein must be made solely on the information contained in the Private Placement Memorandum. Certain assumptions may have been made in the contents of this publication to produce the results presented with the effect that changes to the assumptions may have a material impact on any returns or valuations detailed. Prices in any documentation presented are subject to change without notice and no representation is made that any returns or valuations indicated or mentioned would be achieved. Past performance is not necessarily indicative of future results. Additional information on PAF is available upon request.
