1©2017 PayNet Inc.

Taking the RiskOut of Small

Business Lending

www.paynet.com© 2016 PayNet Inc.

Commercial Equipment Trends

Nirvana

CLFA National ConferenceSeptember 2017

… but Keep Your Head on a Swivel

2©2017 PayNet Inc.

CFLA/PayNet Canadian Equipment Lending Index

Originations14% YoY

3©2017 PayNet Inc.

PayNet Canadian Business Lending Indices

PayNet CanadianSmall BusinessLending Index

6% YoY

PayNet CanadianMedium BusinessLending Index

14% YoY

4©2017 PayNet Inc.

Growth Everywhere … Except Atlantic Canada

CFLA INDEX +14%

ACCELERATING INVESTMENTis growing the Canadian economy

Powering Growth:TransportationConstructionRetailOther

5©2017 PayNet Inc.

YoY

PayNet Canadian Small Business Lending Index

AtlanticCanada

5%

Ontario 4%

Quebec 2%

BritishColumbia

5%

YoY

YoY

YoY

6©2017 PayNet Inc.

YoY

YoY

YoY

PayNet Canadian Small Business Lending Index

Trans. 17%

Const. 9%

Retail 9%

Acc. & Food 13%

Agric. 2%

Manuf. 9%

YoY

YoY

YoY

7©2017 PayNet Inc.

Credit Conditions Nirvana

INDUSTRY SECTORS All Improved but AG

PROVINCES“Running the Table”

Conditions are really good for businessRIGHT NOW

8©2017 PayNet Inc.

CFLA/PayNet Canadian Equipment Delinquency Index – 30+ Day

Delinquencies43bp YoY

9©2017 PayNet Inc.

CFLA/PayNet Canadian Equipment Delinquency Index – 90+ Day

Delinquencies18bp YoY

10©2017 PayNet Inc.

PayNet Canadian Small Business Delinquency Index – 30+ Day

Agric. 19bpConst. 19bpRetail 18bpAcc. & Food 38bpOther 8bp

Wholesale15bpProf. Serv.

Transpo.19bp

Manuf. 46bp23bp

MoM

MoM

MoM

MoM

MoM

MoM

MoM

MoM

MoM

11©2017 PayNet Inc.

PayNet Canadian Small Business Delinquency Index – 30+ Day

Quebec 19bpBritishColumbia

19bp

Alberta 38bp

AtlanticCanada

8bp

Ontario

15bpManitoba

Saskatchewan19bp

46bp

MoM

MoM

MoM

MoM

MoM

MoM

MoM

12©2017 PayNet Inc.

2009 2016 F2017

Default Nirvana For Now

4.5% 2.1% 1.8%RISK & REWARDFuture - Expansion will result in winners and losers

13©2017 PayNet Inc.

Historical Default Rates

RecessionSurvival ofthe FittestAll-TimeLowReturn toNormal

14©2017 PayNet Inc.

Industry

Retail

Construction

General

Transportation

Health Care

Agriculture

All Industries

PayNet Historical & Forecasted Default Rates

2009

n/a

4.8%

3.8%

6.6%

n/a

1.8%

4.5%

2016

2.3%

2.4%

2.2%

2.7%

1.6%

0.7%

2.1%

2018

3.5%

1.9%

2.3%

2.4%

1.7%

1.8%

2.1%*2017 Forecasts Include 2 Quarters of Actual Defaults

2017*

2.3%

1.9%

2.2%

1.8%

1.8%

1.4%

1.8%

15©2017 PayNet Inc.

THANK YOUSBInsights.PayNetOnline.ca/cfla-indices

TElliott@PayNet.com