CAN Capital 2014

Presale:
CAN Capital Funding LLC

Primary Credit Analysts:
John J McCarthy, New York (1) 212-438-1145; j.mccarthy@standardandpoors.com
Christina Rossi, New York; christina.rossi@standardandpoors.com
U.S. Structured Credit New Issuance:

Winston W Chang, Lead Analytical Manager, New York (1) 212-438-8123;
winston.chang@standardandpoors.com
Analytical Manager:
Weili Chen, New York (1) 212-438-6587; weili.chen@standardandpoors.com
Legal Contact:
Stuart Stahl, New York (212) 438-5627; stuart.stahl@standardandpoors.com
Table Of Contents
$191 million fixed-rate asset-backed notes series 2014-1
Transaction Overview
Rationale
Transaction Strengths
Transaction Weaknesses
Mitigating Factors
Transaction Structure
Company Background And Product Information
Originations And Underwriting
Collections
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT OCTOBER 1, 2014 1

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Table Of Contents (cont.)
Servicing
Backup Servicing
Pool And Structural Characteristics
Credit Support
Payment Structure And Cash Flow Mechanics
Credit Analysis
Stressed Portfolios And The Small Business Portfolio Evaluator
Surveillance
Standard & Poor's 17g-7 Disclosure Report
Appendix
Related Criteria and Research

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Presale:
CAN Capital Funding LLC
$191 million fixed-rate asset-backed notes series 2014-1
This presale report is based on information as of Oct. 1, 2014. The ratings shown are preliminary. This report does not constitute a
recommendation to buy, hold, or sell securities. Subsequent information may result in the assignment of final ratings that differ from the
preliminary ratings.
Preliminary Ratings As Of Oct. 1, 2014

Class Preliminary rating (i) Preliminary amount (mil. $) Hard credit enhancement (%)
A A (sf) 171.0 15.00
B BBB- (sf) 20.0 5.00
(i) The rating is preliminary and subject to change at any time.
Transaction Profile
Expected closing date Oct. 15, 2014
Stated maturity date April 15, 2020
Collateral A revolving pool of loans and merchant cash advances made to U.S. small businesses to fund their working
capital needs.
Note payment frequency Monthly on the 15th
Underwriter Guggenheim Securities LLC
Seller and servicer CAN Capital Inc.
Indenture trustee U.S. Bank N.A.
Backup servicer First Associates Loan Servicing LLC
Transaction Overview
This is the first time that Standard & Poor's Ratings Services has assigned preliminary ratings to a transaction backed
by a revolving portfolio of loans and merchant cash advances (MCAs) made to U.S. small businesses to fund their
working capital needs. CAN Capital Inc. (CAN Capital)--the originator, seller, and servicer--is a leader in this emerging
segment of small business financing, which is characterized by proprietary risk models and rapid decision-making.
First Associates Loan Servicing LLC (First Associates) will serve as the backup servicer for the transaction. The
company has experience servicing loan and MCA products similar to the ones included in this transaction.
CAN Capital Funding LLC will issue the series 2014-1 notes in two classes, class A ($171 million) and class B ($20
million), both of which will have a fixed coupon. The notes will be paid sequentially at the end of a 30-month revolving
period, beginning with class A. Credit enhancement built into the transaction includes overcollateralization,
subordination, excess spread, a reserve account, and any available funds on deposit in a cash-trapping account. We
expect the initial overcollateralization amount to be 4.5% of the closing date asset balance and 0.5% of funded reserves

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Presale: CAN Capital Funding LLC
at closing. The class A notes will benefit from 10% of subordination from the class B notes. Total credit enhancement
for the class A notes will be 26%, consisting of a minimum level of 11% in excess spread, 0.50% of funded reserves,
4.5% of overcollateralization, and 10% of subordination. Credit enhancement for the class B notes will be 16%,
consisting of a minimum level of 11% in excess spread, 0.50% of funded reserves, and 4.5% of overcollateralization.
For underwriting and servicing purposes, CAN Capital makes a clear distinction between a default on a loan and the
non-performance by a merchant that sold receivables to CAN Capital under an MCA agreement. For an MCA, there is
no concept of a default--a failure of a remittance to be received by CAN Capital or an insolvency of a merchant does
not trigger any recourse under an MCA, there is no set term or maturity date under an MCA, and CAN Capital is only
entitled to a portion of future sales, to the extent there are any future sales. A non-performing MCA is one that goes 32
consecutive days with no remittances to CAN Capital. In this presale report, for the purposes of describing our
analytics and our criteria, we use the term "default" globally to describe both loan default and MCA non-performance.
Rationale
The preliminary ratings assigned to CAN Capital Funding LLC's asset-backed notes series 2014-1 reflect our
assessment of:
• The available credit enhancement in the form of subordination (for the class A notes), overcollateralization, a funded
reserve account, and excess spread;
• The transaction's legal structure, which is intended to be bankruptcy-remote;
• The credit quality of the initial and future collateral portfolio, which consists of a revolving pool of secured,
fixed-rate small business loans and MCAs;
• The issuer's ability to make timely interest and ultimate principal payments on the notes,
• The servicing capability of servicer CAN Capital and backup servicer First Associates.
Transaction Strengths
The transaction's strengths include:
• It is backed by a small business loan and MCA portfolio that is highly diversified in terms of business sector and
location.
• Loans and MCAs are underwritten using a CAN score, a predictive indicator of loan default (or non-performance in
the case of MCAs) that we observed to be more predictive than alternatives such as consumer credit scores.
• CAN receives loan payments and MCA remittances on a daily basis, and the collateral generally has very short
tenors, which help to mitigate the risk exposure to small businesses. Combined, these features have demonstrated
CAN Capital to be very responsive to changes to the business risk landscape in the past.
• CAN Capital is a leader in this fast-growing small business finance segment and has been active in it longer than any
of its peers.
• CAN Capital risk-prices its products such that a business with a higher CAN score ends up paying a higher loan
interest rate or selling its future receivables with a higher discount rate. Risk-pricing can be effective in absorbing
higher losses in a transaction backed by a revolving collateral pool.

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Transaction Weaknesses
The transaction's weaknesses are:
• The pool of loans and MCAs revolves, and so its credit quality could deteriorate relative to both the initial pool and
CAN's historical performance. The pool could also be affected if CAN Capital were to loosen its underwriting criteria
or become exposed to unforeseen risks not previously seen by CAN.
• MCAs are not loans and have risks that lending instruments don't. For example, a merchant bankruptcy would not
entitle the holder of the MCA contract to any recovery on the investment. Since the MCA represents a purchase by
CAN of future payment card sales, a merchant closing its business results in no further remittances on the MCA.
• At the individual asset level, those with slow remittance speed exceeding certain levels are excluded from the asset
base. At the portfolio level, certain performance triggers would lead to cash-trapping or rapid amortization if the
aggregate excess spread were to drop below pre-set levels. Both features can help to mitigate MCA slow remittance
risk.
• Aside from MCA nonperformance risk, the MCAs do not have fixed payment amounts or maturities, which can
subject them to slower–than-expected remittance speeds. This would effectively reduce the excess spread available
to support the transaction.
• Through most of its history of origination, CAN Capital's product was offered exclusively provided MCAs. By
stressing that history, non-performance risks, in particular those caused by merchant business failures, are
sufficiently covered, in our opinion.
• Servicing MCAs, which entails experience working with credit card processors, is more specialized than servicing a
typical small business loan backed transaction.
Mitigating Factors
The transaction's weaknesses are partially mitigated by:
• Our collateral pool composition assumptions, which are based on the transaction's portfolio eligibility criteria and
concentration limitations, allowed us to construct stressed collateral portfolios to assess higher loan default or MCA
non-performance risks.
• We believe the back-up servicer, First Associates, has the related experience to take over if CAN Capital were to
become unable to continue to service the portfolio.
Transaction Structure
The transaction is intended to be structured as a master trust. CAN Capital will sell the assets to CAN Capital Funding
LLC. The issuer is intended to be bankruptcy remote under Standard & Poor's special-purpose entity criteria. The
issuer will pledge the assets to an indenture trustee to securitize the series 2014-1 notes.
Company Background And Product Information

CAN Capital has provided access to more than $4 billion in funding to underserved small and medium-sized
businesses since 1998. The company has grown quickly. In 2013, its total fundings extended to merchants increased to

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about $800 million (48%).
The company uses a proprietary model to assess the probability of merchant default or non-performance using
predictive measures. The model assigns a score between 0 and 100 that is referred to as a CAN score. The CAN score
is based on an evaluation of how each merchant is expected to perform based on business, industry, and economic risk
factors compared with merchant cohorts represented within CAN Capital's proprietary database. The database
includes 16 years of transaction history and performance data and comprises more than $4 billion in more than
130,000 merchant funding transactions. The way the model is set up, a lower CAN score means lower risk.
CAN Capital and its subsidiaries source the loans and MCAs through the company's direct marketing channels,
renewal contracts, and external partnerships with third parties. All assets CAN Capital sources are either originated
directly through its subsidiaries (MCAs and a small percentage of loans) or through an outside relationship with
WebBank (most loans).
The loans and MCAs represented within the series 2014-1 transaction will fit the description and specifications
outlined below:
• Small business loans: Nearly all of the small business loans that CAN Capital and its subsidiaries source are
originated, underwritten, and funded by WebBank, a Utah-chartered industrial bank and FDIC member. The
servicing relationship is maintained by a subsidiary of CAN Capital, CAN Capital Asset Servicing Inc. (CCAS). Under
the current WebBank agreement, WebBank may offer to sell the loans to CCAS, and CCAS may elect to purchase
the loans without obligation. CCAS also has the option to directly originate up to 10% of loans to merchants in
certain states. The merchant loans are secured by a pledged interest in the merchant's personal property.
• MCAs: CAN Capital's subsidiaries provide working capital to merchants through a discounted purchase of a fixed
portion of the future merchant payment card sales. The amount of sales receipts remitted to CAN Capital daily is
based on the level of daily merchant payment card sales, a fixed percentage of which is remitted to CAN Capital.
Therefore, MCAs have no fixed payment amounts or maturity dates.
The initial purchase price of an MCA transaction is reflected in the ratio between the specified amount of receivables
purchased and the discounted purchase price paid. Prior to entering into an MCA contract, CAN Capital estimates an
expected underwritten turn, which is the company's projection of the number of months that it will take for CAN
Capital to collect all of the purchased receivables based on expected merchant sales. If merchant sales volumes
decline a certain percentage from projected levels (e.g., actual remittances fall to 60% of projected remittances at a
specified point in time), the MCA will no longer be in line with the transaction's eligibility criteria. This concept is
referred to as an "MPP asset" within the eligibility criteria. The actual period of time over which purchased receivables
are collected can be determined only after the entire specified amount is remitted.
CAN Capital's MCA contracts require business owners to personally guarantee their businesses' adherence to certain
covenants. One such covenant requires exclusive use of a designated payment card processor, which allows CAN
Capital to automatically receive the agreed-upon percentage of merchant payment card sales daily. Failure by a
merchant to comply with such covenants would constitute a breach of its MCA contract. If there is reasonable
evidence of a contract breach, CAN Capital would have recourse to the merchant. However, CAN Capital does not
have any recourse against merchants that go out of business prior to remitting the specified amount of receivables

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purchased by CAN Capital, and unlike loans, MCAs do not include any personal guarantee of payment.
Originations And Underwriting

Sourcing
CAN Capital provides access to loans and MCAs to address the working-capital needs of small businesses. The
businesses must be U.S. based and must have been operating with revenue of at least $500,000 for more than one year.
In addition, CAN Capital has specialty programs for smaller businesses with lower annual operating revenue or with
shorter operating history. The current average funding amount is about $40,000.
CAN Capital and its subsidiaries source the loans and MCAs through the company's direct marketing channels,
renewal contracts, and external partnerships with third parties. The company's third-party partnerships include 200
active relationships with independent sales organizations (ISOs), which may submit merchant applications to CAN
Capital's underwriting operations team for review. The ISOs are not involved in any of the underwriting decisions.
CAN Capital or WebBank must pre-approve MCA or loan applications, respectively, submitted through these channels
before origination and underwriting review.
Underwriting review
When deciding whether to source funding for small businesses, CAN Capital, for its own account or as a servicer on
behalf of WebBank, considers the following factors, among others:
• Merchant profile (i.e., business sector and region);

• Business and personal credit history (i.e., FICO); and
• Merchant sales data or bank statements.
CAN Capital uses each of these factors as inputs into its proprietary scoring model to derive the CAN score used to
estimate the probability of non-performance for each merchant. The CAN score is also used to establish funding terms
and pricing. All merchant information provided to CAN Capital is verified as part of the underwriting process.
Loans
Loans to merchants with a CAN score of 25 or lower are generally pre-approved and forwarded to WebBank for
underwriting review. The remainder are required to undergo a manual approval process prior to being sent to
WebBank. WebBank uses CAN Capital's technology platform and CAN scores as part of its underwriting process.
MCAs
The relevant CAN Capital subsidiary carries out a similar approval process for MCAs, with all merchants meeting a
CAN score threshold of 25 or lower generally receiving automatic pre-approval. The CAN Capital subsidiary also
determines a minimum return on investment (ROI) that the MCA contract will be designed to meet. In determining
whether the contract can meet this ROI, CAN Capital projects an "estimated turn," which is CAN Capital's projection of
the number of months that it will take for CAN Capital to collect all of the purchased receivables based on expected
merchant sales.

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Collections
Loans
Collections occur each business day, whereby fixed repayment amounts are automatically debited from the merchants'
business bank accounts and remitted to CAN Capital, either for its own account or to a WebBank account, as
appropriate. This process is handled by a designated ACH operator.
MCAs
CAN Capital's MCA contracts require all merchants to agree to use designated payment processors. This allows a fixed
percentage of daily merchant payment card sales to be remitted automatically to CAN Capital daily as long as the
merchants' customers transact using specified payment cards supported by CAN Capital's payment processors. When
payment card charges processed by the merchant are reversed (i.e. dilution of payment card purchases), CAN Capital's
share of collections would be reversed as well, and netted against the next day's collections.
Account monitoring
If a contract experiences a temporary break in remittances, the servicing group's asset management department
reaches out to the merchant to determine the cause. Many of these instances result from temporary operational issues,
and the loans/MCAs in question do not end up as part of the nonperforming population. In addition, the servicing
group has systems in place to monitor all merchant accounts to determine whether any of them are remitting outside
of the expectations that were projected at the time of underwriting. In these cases, the asset management department
reaches out to the merchants to investigate the cause. These cases account for a small percentage of the population.
(Refer to "Servicing" section for more information on the Asset Monitoring process.)
Loss history
CAN Capital has demonstrated mid-single-digit loss rates on its loans and MCAs. Approximately 6% of CAN Capital's
contracts become nonperforming, which means that they have gone 32 days without collection (either due to a
delinquent loan or to no remittances on an MCA contract). These accounts are worked on by the company's
collections group, resulting in ultimate collection of about 22% of nonperforming amounts on average, either before or
after they are written off. Accounts are written off if they go 120-150 days without collection.
Servicing
Receipt of collections on the pooled assets will depend on the ability of the servicer to collect loan payments and MCA
remittances. CAN Capital began servicing MCAs in 1998, upon origination of the company's first MCA transaction by
one of the company's subsidiaries. Subsequently, CAN Capital began servicing small business loans in 2010.
CAN Capital has dedicated teams in Kennesaw, Georgia, responsible for servicing, customer service, and asset
collections. These teams are primarily responsible for monitoring loan payments and MCA remittances, investigating
nonperforming MCA accounts for potential covenant breaches, and handling customer service, collections, and
workouts. The servicing team uses its proprietary daily remittance platform to process and monitor collections on the
assets. The team seeks to optimize collections through a combination of phone calls, collection letters, email

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notifications, and its network of attorneys if necessary, as per the terms of the loan or MCA agreement.
The servicer monitors daily loan payments and MCA remittances and compares the actual performance of the assets
to the expected performance profile, projected at the time of underwriting. If an account deviates from expectations, it
is assigned to a member of the asset management team to investigate the reason. Accounts are also assigned to a
member of the asset management team if there was no loan payment or MCA remittance received for two to seven
consecutive business days. For accounts that remain unresolved after two to seven consecutive days, the asset
management team will determine whether there is reasonable evidence of an MCA contract breach (in the case of an
MCA contract), in which case CAN Capital would have recourse against the merchant. In these instances, the
company would make a decision either to have the merchant rectify the breach or to have the collections team enter
into a workout agreement. If, on the other hand, it is determined that the delay in remittance was not caused by a
contact breach, then CAN Capital would not have any recourse to the merchant and the account would be closed by
the collections team. All nonperforming accounts that have gone 32 days or more without collections are handled by
the company's collections team.
Backup Servicing
If CAN Capital were to be removed as servicer of the pooled assets, all servicing responsibilities would be transitioned
to First Associates, as the backup servicer for this transaction. First Associates was founded in 1986 and is
headquartered in San Diego. The company has experience servicing both the loan and MCA product types in addition
to a wider range of asset types. As backup servicer, the company would assume the following daily responsibilities
under a successor servicing agreement:
• Providing information to the designated payment processors and ACH operators that debit the merchant bank
accounts to collect on the loan payments and MCA remittances. In the case of the MCAs, this would also include
batch-splitting of CAN Capital's share of the merchants' credit card sales.
• Collecting all amounts owed as a result of defaulted loans or breaches of MCA contracts.
• Posting daily loan payments and MCA remittances.
• Adoption and enforcement of the CAN Capital contracts.
Warm backup servicing

Prior to assuming these daily ongoing responsibilities, First Associates will begin fulfilling its services as a warm
backup servicer on the transaction's closing date. These services will include mapping of asset data and carrying out
subsequent accuracy and completeness testing, ensuring read-only access to the account to which all merchant
payments and remittances are made, monthly reporting to relevant parties, receipt of servicer templates used for loan
and MCA administration, and conducting an annual on-site review of the servicer's processes and procedures.
Hot backup servicing

In addition to First Associates' responsibilities as a warm backup servicer, the company must also be ready to respond
to a hot backup servicer trigger event as of any payment date. This type of trigger event will occur if the three-month
weighted average spread falls below 15% or in the case of any other such type of trigger event identified in the
indenture supplement. Upon notification of a hot backup servicer trigger event by the issuer, First Associates will be

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required to re-confirm full access to all of the information it had access to as a warm backup servicer. First Associates
will also be required to re-test the accuracy and completeness of all asset data boarded on its test servicing platform
prior to moving the data to its production servicing platform. Any newly transferred assets will also need to be moved
onto the production servicing platform on an ongoing basis. First Associates will also be responsible for nightly data
backups as well as monthly reconciliation and certification of settlement statements prior to sending these to the
trustee.
Pool And Structural Characteristics

The revolving asset pool is subject to specified eligibility criteria to limit downside changes in credit quality that could
result from changes to the pool's composition. The asset pool is also subject to specified concentration limitations to
limit exposure to specific types of geographic, industry, business, or underwriting risks. In addition to these limitations
on asset-specific risks within the pool, there are structural features to provide additional payment protections to the
noteholders.
Eligibility criteria
During the 30-month revolving period, beginning with the closing date and ending with the first payment date in 2017,
each of the assets transferred by CAN Capital to CAN Capital Funding LLC pursuant to the asset purchase agreement
is required to be an eligible asset.
The eligible assets must meet the following requirements, among others:
• Have an original underwritten MCA turn or loan term of less than or equal to 24 months;
• After giving effect to the acquisition of the asset by the issuer, the weighted average initial pricing ratio of all
performing assets is greater than 1.20x;
• After giving effect to the acquisition of the asset by the issuer, the weighted average CAN score of all performing
assets is less than or equal to 15;
• The funded amount with respect to such asset does not exceed $375,000;
• After giving effect to the acquisition of the asset by the issuer, the average unamortized funding amount of
performing assets is less than or equal to $60,000; and
• Such asset is not a defaulted asset or MPP asset.
Concentration limitations
As stated, the asset pool is also subject to specified concentration limitations to maximize diversification within the
asset pool while limiting exposure to specific types of geographic, industry, business, or underwriting risks. If any of
the assets in the pool were to exceed these limitations, the performing asset balance would be adjusted such that no
credit would be given to any asset balances in excess of the concentration limitation.
The asset pool is required to meet the following concentration limitations, among others:
• Merchants located in California can't constitute more than 20% of the pool; those in Texas, Florida, or New York
can't account for more than 15%, and the maximum portion from any other state is 10%.
• Merchants in business less than five years can account for no more than 25% of the pool, and those operating for
less than three years can only constitute 10%.

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• Merchants in the food and drug retailers or health care sectors can only make up 35% or 30% of the asset pool,
respectively, and no other industry can account for more than 20%
• Merchants with revenue of less than $300,000 are limited to 10% of the asset pool.
• Merchants with a CAN score of more than 25 are limited to 3% of the asset pool.
2014-1 pool composition as of the statistical cut-off date

The identified collateral pool presented to Standard & Poor's for its rating analysis had the characteristics and
consisted of the industry, collateral type, and geographic distributions (as of Aug. 31, 2014) shown in table 1.
As we see from the collateral pool, the loans in the pool have slightly larger average funded amounts and longer
weighted average terms than the funded amounts and estimated turns for MCAs.
Table 1
Identified Collateral Pool
Loans MCAs Total
Number of assets 4,270 2,801 7,071
Aggregate unamortized funded amount ($) 131,963,318.32 68,055,438.49 200,018,756.81
Average unamortized funded amount ($) 30,904.76 24,296.84 28,287.20
Average funding size ($) 45,793.43 40,462.16 43,681.58
Weighted average term or estimated underwritten turn (months) 13.88 13.53 13.76
Weighted average remaining underwritten term or turn (months) 9.65 9.35 9.55
Ratio of weighted average repayment amount or specified amount to funded amount 1.33 1.31 1.32
Weighted average CAN score 8.53 9.9 9
Average years in business 12.12 12.8 12.39
Average gross annual sales ($) 1,065,096.87 769,261.40 947,909.04
Average % gross sales taken 5.73 8.11 6.67
Average specified percentage N/A 20.39 N/A
N/A—Not applicable.
Table 2
Pool Composition
(% of pool unamortized funded amount) Loans MCAs Total
CAN score
<= 5 31.17 25.23 29.2
6 to 10 42.67 37.41 40.9
11 to 15 19.69 23.02 20.8
16 to 20 4.65 10.08 6.5
21 to 25 1.08 3.19 1.8
26 or greater 0.74 1.07 0.9
New merchant originations 43.12 21.62 35.81
Renewal merchant originations 56.88 78.38 64.19
Top industry concentrations

Food/drug retailers 14.05 45.51 23.39
Health care 22.41 9.64 18.07
Building and development 16.63 2.83 11.93

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Table 2
Pool Composition (cont.)
Automotive 7.64 10.66 8.67
Business and equipment services 9.54 4.64 7.87
Top state concentrations

California 16.41 14.13 15.64
Texas 8.58 8.69 8.62
Florida 8.93 6.76 8.19
New York 5.98 7.37 6.45
Structural payment triggers

In addition to the limitations on asset-specific risks within the pool, there are structural features built into the
transaction to provide payment protections to the noteholders:
Cash-trapping event. At any time prior to a rapid-amortization event, a cash-trapping event will be triggered if the
three-month weighted average excess spread were to fall below 13%. In this case, all note proceeds would be diverted
to a cash-trapping account and would be released only if the cash-trapping event were to be cured or if a
rapid-amortization event were to occur.
Rapid-amortization event. Rapid amortization will be initiated by any of the following events: servicer default,
bankruptcy of the seller or servicer, event of default with respect to the series 2014-1 notes, or a rapid-amortization
trigger event. Such trigger events will include if the three-month weighted average excess spread should fall below
11%, if the aggregate number of merchants in the performing asset pool falls below 500, or if the adjusted performing
asset balance falls below the target asset balance.
Credit Support
Credit enhancement for the series 2014-1 notes will be provided in the form of overcollateralization, subordination,
excess spread, a reserve account, and any available funds on deposit in a cash-trapping account. The class A notes will
receive 10% of subordination from the class B notes.
Excess spread
The level of excess spread available will be based on collections received on the performing asset balance, less the
sum of fees and required interest payments. Therefore, the amount of excess spread available at any time will be
limited by uncollected amounts on non-performing loans and MCAs, or as a result of slower-than-expected actual
remittance rates of performing MCAs.
Overcollateralization
The level of overcollateralization is the amount by which the aggregate unamortized funded amount of pooled assets
exceeds the aggregate outstanding principal amount of the series 2014-1 notes. The initial amount of
overcollateralization is expected to be 4.5% of the closing date asset balance.
Reserve account
An initial deposit will be made on the closing date, in an amount equal to 0.50% of the target asset balance as of the
closing date. This amount is fixed for the life of the transaction until a rapid amortization event occurs, when it will be

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released in full.
Subordination
Subordination for the class A notes will be 10% of the initial pool balance. The class B notes will be subordinated to the
class A notes such that no payments of principal of the class B notes will be made until the class A notes have been
paid in full, and no payments of interest on the class B notes will be made until all payments of interest due and
payable on the class A notes have been made.
Payment Structure And Cash Flow Mechanics

Interest
The series 2014-1 notes will bear interest at the series 2014-1 note rate. Interest accrued but not paid on a payment
date will be payable on the subsequent payment date, together with interest on the unpaid amount at the applicable
interest rate. Interest on the series 2014-1 notes will accrue on a 30/360 basis.
Principal
During the amortization period, principal payments will be made on a pro rata basis, based on the adjusted performing
asset balance. If any of the assets in the pool were to exceed these limitations, the performing asset balance would be
adjusted such that no credit would be given to any asset balances in excess of the concentration limitation.
Revolving period
The transaction is expected to have a revolving period of 30 months, starting with the closing date and ending on the
first payment date in 2017. During the revolving period, there is no principal amortization. Instead, extra cash after
payment of interest would be used to purchase additional collateral. Each of the assets transferred by the seller to the
issuer is required to be an eligible asset, as defined by the eligibility criteria.
Amortization
Unless a rapid amortization event occurs, the amortization period will begin with the earlier of the first payment date in
2017, the date on which a cash-trapping event is in effect and has continued for six consecutive determination dates,
or if a servicer default occurs, only as defined by a leverage ratio of greater than 8-to-1, tangible net worth of less than
$50 million, or consolidated liquidity of less than $5 million.
Optional redemption
The issuer will have the option to prepay the series 2014-1 notes, in whole but not in part, on any payment date during
the series 2014-1 amortization period.
Priority of payments
After the revolving period, principal on the notes will be paid sequentially, beginning with the class A notes, according
to the following note payment sequence:
Table 3
Payment Priority
Priority Payment
1 Indenture trustee fee, subject to a cap of $250,000

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Table 3
Payment Priority (cont.)
2 Servicing fee equal to the product of one-twelfth of 3.00% times the series 2014-1 invested percentage of the performing asset balance
during the preceding collection period
3 Backup servicing fee, subject to a cap of $250,000
4 Current and any carry-forward interest, first to the class A noteholders and second to the class B noteholders
5 At final maturity, Class A note principal until reduced to zero, and then Class B note principal until reduced to zero
6 During the revolving period, distribute to the principal account an amount equal to the product of the maximum advance rate and any
amount required to cause the adjusted performing asset balance to satisfy the target overcollateralization amount for each class
7 During the amortization period, pay principal due, first to the Class A noteholders and second to the Class B noteholders
8 If the amount on deposit in the reserve account is less than the reserve account required balance, the lesser of 1)the product of the
amount remaining after paying Items 1-7 and the cash-trapping percentage and 2) the amount required to cause the reserve account to
equal the reserve account required balance. If a cash-trapping event is in effect, to the cash-trapping account, the product of the
amount remaining after paying Items 1-7 and the cash-trapping percentage
9 Pro rata, pay any fees and expenses not paid in Items 1 or 3 above due to the caps
10 Any remainder to the series 2014-1 settlement account
Events of default
Upon the occurrence of an event of default, the series 2014-1 notes and, if applicable, other series of notes issued by
the issuer may be accelerated. An event of default with respect to the series 2014-1 notes will occur upon any of the
following events:
• A default in the payment of interest on any note of any series, which continues for five business days or more;
• A default in the payment of principal of any note of any series when due;
• Failure by the issuer to adhere to the covenants agreed to in the transaction documents, continuing for a period of
30 days or more, or continuing for a period of up to 60 days if such period is deemed reasonably necessary to satisfy
the covenants subject to certain conditions;
• An event that causes the issuer to be treated as a corporation for tax purposes or otherwise to be subject to U.S.
federal income tax on a net income tax basis;
• The SEC or other regulatory body deems that the issuer is an investment company, according to the Investment
Company Act of 1940; or
• Certain bankruptcy or insolvency events occur with respect to the issuer.
Credit Analysis
This transaction consists of a revolving portfolio of loans and MCAs to U.S. small businesses. We have not seen a
securitization including MCAs prior to this transaction. From a credit risk perspective, the collateral is similar to those
backing other small business loan-backed securitizations that we rate, as our analysis shows that both collateral types
are sensitive to the macroeconomic conditions in which these businesses operate. As such, we believe that the recent
re-calibrated U.S. small business loan securitization criteria ("Methodology And Assumptions For U.S. Small Business
Loan-Backed Securitizations," March 28, 2014) are applicable to this transaction.
At the same time, there are meaningful differences between a typical small business loan pool and the CAN Capital
Funding 2014-1 asset pool: (1) The CAN Capital Funding asset pool revolves, whereas a typical small business loan
pool is static; and (2) The CAN Capital asset pool can have up to 100% MCA—receivables purchases that only entitle
the buyer to receive a fixed percentage of a small business' future payment card sale receipts, with no recovery offered

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to the holder of the MCA contract in the case of a merchant bankruptcy. In addition, MCAs are exposed to small
business nonpayment risks--for example, regular business closure can also result in nonpayment for MCAs.
For these and other reasons, we have supplemented our small business loan securitization criteria with those of other
asset classes. For example, in determining loss levels, we also applied criteria for asset backed securities (ABS)
equipment loans and leases, outlined in the "ABS Multiples" branch of the chart below. Before the application of the
small business criteria, a key part of which is running the Small Business Portfolio Evaluator as depicted in the other
branch of the chart, we did extensive analysis to determine an appropriate method to stress the pool composition. For
our analysis, we focused on two stressed pool compositions that we believe are representative of the
default/nonperformance risk of a revolving portfolio: 1) concentrated exposure to risky business sectors and 2)
deterioration in underwriting not captured in CAN Capital's history.
We chose to calibrate the loss levels generated by the small business criteria to be equal to those by applying the ABS
equipment loans and leases criteria. The details of the calibration are further outlined in the sections that follow. Either
way, our credit analysis enables us to conclude that for the CAN Capital 2014 collateral pool, the loss levels generated
under our stress scenarios satisfy criteria applicable to what we consider to be related asset classes. The ABS
equipment approach measures losses under the scenario that for an actuarial pool, if CAN Capital's history were to
repeat itself, that history would be a reasonable basis for establishing a base case loss scenario to which we would
apply rating-specific stress multiples. The small business approach, on the other hand, measures losses that may result
from a downward change in credit quality if the revolving pool were to drift to riskier business sectors or if CAN
Capital's underwriting were to deteriorate beyond what its historical results have reflected.
We then compared the available credit enhancement to each class with their respective loss scenarios. For the class A
Notes, we estimate the stress loss level to be 25.33%, supported by the available credit enhancement of 26%. For the
class B Notes, we estimate the stress loss level to be 14.97%, supported by the available credit enhancement of 16%.

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For the purposes of our analysis, we focused on the past 10 years of CAN Capital's transaction history, which we
believe to best reflect more recent refinements to the company's risk model and framework. The database used in our
analysis contains history on 111,804 loans and MCAs funded between 2004 and 2013. The total volume is
approximately $3.5 billion.
Stressed Portfolios And The Small Business Portfolio Evaluator

Base case default analysis
The starting point of our analysis is the initial collateral pool: If the CAN Capital 2014-1 portfolio were to remain static,
the application of our small business criteria would generate default levels outlined in the following section.
As part of our base case default analysis, we first evaluated CAN Capital using the framework provided as part of our
small business criteria to assess the company's performance history and underwriting quality. We assigned CAN
Capital a performance history score of 3 and an underwriting quality score of 3.4, based on the information provided to

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us during the analytical process. The performance history score is based on a comparison of CAN Capital and SBA
default rates across the same business-industry codes (known as Standard Industrial Classification [SIC] codes). As
shown in the plot below, CAN Capital merchants have demonstrated significantly lower default rates than SBA
merchants across the same SIC codes. The 45 degree line delineates the performance region: Above it are cases where
CAN Capital's SIC code based defaults are higher than the relative performance of the SBA pool, and below, the
opposite. Of the 50 top SIC codes in CAN Capital's history, only three have a higher defaults than the relative SBA
pool. For this reason, we scored CAN Capital a '3' for table one (the data comprise more than 10 years of history, with
defaults of between 50% and 100% of the overall SBA default rate (as per table 1 of the small business criteria), as
compared to the relative performance of the SBA pool, and the history includes a moderate economic stress).
Chart 2
Table 4 below (which is table 1 in the small business criteria) outlines the Performance History scoring framework:
Table 4
Performance History Score (Contributes 80% Of The Overall Score)
Greater than 10 years of Five to 10 years of Less than five years of
history history history
Default rate less than 10% (of overall SBA default rate) 1 2 2

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Table 4
Performance History Score (Contributes 80% Of The Overall Score) (cont.)
10% less than or equal to default rate less than 25% (of 2 3 3
overall SBA default rate)
25% less than or equal to default rate less than 50% (of 3 3 4
overall SBA default rate)
Default rate greater than or equal to 50% less than 100% 4 4 4
(of overall SBA default rate)
Default rate greater than or equal to 100% (of overall SBA 4 4 4
default rate)
SBA--U.S. Small Business Association.
With regard to the underwriting quality assessment, we scored CAN Capital '4' in each of the five categories except
with respect to the category "Infrequent change of the underwriting criteria". This is because CAN Capital has been
using its scoring model for more than 10 years; the model removes some amount of discretion typically seen in more
manual underwriting.
Overall, CAN Capital's score has proven to be highly predictive of the loan default/MCA non-performing outcome.
Therefore, we scored CAN Capital a '1' in this category.
Table 5 (which is table 2 in the small business criteria) outlines the underwriting quality scoring framework:
Table 5
Underwriting Quality Score (Contributes 20% Of The Overall Score)
Yes No
Average LTV ratio less than or equal to 80% 1 4
Personal guarantee greater than or equal to 50% 1 4
Average DSCR greater than or equal to 1.25x 1 4
Infrequent change of underwriting criteria (that is, no material change in the last five 1 4
years)
Regular audit of underwriting (that is, does the underwriter consistently apply the 1 4
guidelines?)
Total category score 5-20
LTV--Loan-to-value. DSCR--Debt service coverage ratio.
Our small business criteria framework assigns weightings of 80% and 20%, respectively, to these two scores. This
resulted in an overall weighted average score of 3.08, which corresponds to a probability of default (PD) scaling factor
of 84.67% (out of a possible 50%-75% scaling factor range for a non-SBA loan pool).
To give credit to the series 2014-1 loan pool's diversification, we ran the entire portfolio through the Small Business
Portfolio Evaluator model. The resulting base case scenario default rates (SDR) applicable at the 'A' and 'BBB-' levels
based on this scaling factor are 39.90% and 28.38%, respectively.
Stressed case default analysis

As discussed, the CAN Capital transaction differs from other small business transactions we rate in a significant way:
The transaction has a revolving period given the short tenor of the loans and the MCAs. During this period, collections
are used to purchase additional loans and MCAs, subject to the set of eligibility criteria described earlier. The eligibility

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criteria and other portfolio concentration limitations are set so as to provide CAN Capital with enough flexibility to
fund future originations and loan purchases from WebBank. This allows for changes to the portfolio, and as a result,
the credit quality of the asset pool could deteriorate. Another risk a revolving portfolio faces is that CAN Capital could
loosen its underwriting criteria or introduce risks not captured in its historical default data. Therefore, we think the
ABS approach, which is based on multiples of historical losses, is insufficient to address the risks.
To supplement this approach, we constructed a number of what we refer to as "stressed portfolios"--those that could
result in higher potential losses than would be generated by the initial portfolio as we outlined in the "Base Case
Default Analysis" section above. From among these stressed portfolios, we selected two that we believe represent
portfolio drift toward worsening credit quality and underwriting drift to unknown risks.
Stressed Portfolio 1
Our small business criteria are calibrated by using the U.S. small business default risk of different sectors, as defined by
the four-digit SIC code. In constructing Stressed Portfolio 1, we attempted to address a scenario in which the portfolio
drifted to business sectors that have higher default risk as determined by our small business securitization criteria while
still satisfying eligibility criteria and concentration limitations.
The table below shows several possible CAN Capital portfolios, each constructed using sectors with the highest default
rates according to our small business criteria; we identified the highest default sectors in CAN Capital's history from
the hundreds of SIC codes represented (based on the past 10 years of origination data used for our analysis). Then, we
narrowed the selection to the top 100 SIC codes, then 50, and finally the top 10. From the left to the right side of the
table, each portfolio becomes more representative of CAN Capital's origination history, and as it does so, the 'A'/'BBB-'
SDRs decrease. This illustrates that the SIC codes with the highest default levels make up a very small percentage of
loans and MCAs underwritten by CAN Capital. This exercise demonstrated to us the relationship of adverse portfolio
selection and the increase in aggregate portfolio default/nonperformance risk.
For Stressed Portfolio 1, we decided to base our final analysis on the pool consisting of the 10 SIC codes from CAN
Capital's entire history with the highest default rates. The 'A' SDR of 59.30% is approximately 49% higher than that of
the CAN Capital's initial portfolio. For the 'BBB-' stress scenario, the SDR is 46.10%, which is 62% higher than that of
the initial portfolio. The higher SDRs represent the additional stress we believe is appropriate for a revolving portfolio.
Table 6
Description Of The Asset Pool
Worst from CAN Worst from CAN
Worst from history--Top 100 SIC history--Top 50 SIC CAN Top 10 CAN 2014-1 Stressed
CAN history codes codes SIC codes portfolio Portfolio 2
% of the 0.91 2.62 44.59 65.36 98.80 94.95
CAN history
# of SIC 10 10 10 10 377* 237
codes
'A' SDRs (%) 59.30 56.00 52.40 38.70 39.90 59.91
'BBB-' SDRs 46.10 42.90 39.20 27.10 28.38 46.03
(%)
Scaling 84.67 84.67 84.67 84.67 84.67 100.00
factor

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Table 6
Description Of The Asset Pool (cont.)
*The count 377 under represents the actual number of business sectors in the CAN Capital 2014-1 initial portfolio. CAN Capital uses a
proprietary industry classification system that blends the SIC codes and its successor the NAICS. We are not able to map its system 100% into
the SIC codes.
Stressed Portfolio 2
Another risk faced by a revolving portfolio is underwriting drift--the risk that CAN Capital could either loosen its
underwriting criteria or introduce unforeseen risks. Our revised small business criteria introduced a framework to deal
with similar underwriting risk: the shorter the history, the higher a scaling factor applied to asset default probabilities
used in the Small Business Portfolio Evaluator. In this case, rather than using the 84.67% scaling factor we applied to
Stressed Portfolio 1, we can use the highest factor under the criteria: 125%.
We developed Stressed Portfolio 2 by randomly sampling CAN Capital's history using a Monte Carlo analysis, which
considered the extent to which the portfolio characteristics could deteriorate while remaining within the portfolio's
eligibility criteria and concentration limitations. The Monte Carlo analysis allowed us to construct 1,000 such
portfolios, each with $200 million in total collateral. We then selected the portfolio outcome resulting in the highest
default rates and ran this portfolio through our Small Business Portfolio Evaluator. This portfolio allows us to relax the
assumption we used in Stressed Portfolio 1, where the SIC codes are restricted to the top 10 with highest historical
default rates--an assumption that introduces a high degree of stress, as the selected SIC codes constitute less than 1%
of the origination in CAN Capital's history. On the other hand, we coupled this portfolio with the highest asset default
scaling factor to account for uncertainty in future underwriting risk inherent in a revolving portfolio. The SDRs for the
'A' and 'BBB-' stress scenarios were 59.91% and 50.04%, respectively (see chart 3).

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Chart 3
Conversion of SDRs into net losses

The CAN Capital 2014-1 collateral also differs from small business loans backing Standard & Poor's rated
securitizations in their loss curves due to the very short tenor of the loans and MCAs CAN Capital originates and
purchases from WebBank. Chart 4 contrasts the progression of the default curves between the two collateral types.

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Chart 4
Also depicted in the chart above is the distinction in terms of default rate as calculated by count and defaulted balance.
At their terminal point, the cumulative default rate by account is approximately twice the level by balance. This makes
sense, as during a typical 12-month term (or MCA estimated turn), some borrowers default right away, and others
default toward the end of the term; when the distribution is averaged, the defaulted amount is approximately 50% of
the initial amount. Default rates used in our small business portfolio criteria are calculated by borrower count.
The ratio of the rate of default by count and that of default by balance varies over time. Under greater economic stress,
the ratio tends to be higher, meaning more accounts default early on and thus diminish the difference between the two
rates. A time series of the ratio of the two rates is plotted in chart 5.

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Chart 5
We applied a conversion factor that converts the cumulative gross default levels into net loss levels (see table 7). The
average net loss levels for the 'A' and 'BBB-' stress scenarios are 25.33% and 14.97%, respectively. These levels, as we
indicated in the beginning of this section, are consistent with those generated by applying appropriate multiples to
CAN Capital's historical losses.
Table 7
Conversion Of Cumulative Gross Default Level Into Net Loss Level
--Portfolio 1-- --Portfolio 2-- --Average--
(%) 'A' 'BBB-' 'A' 'BBB-' 'A' 'BBB-'

Cumulative gross defaults by count 59.30 46.10 59.91 46.03 59.60 46.06
Conversion factor 42.50 32.50 42.50 32.50 42.50 32.50
Net loss 25.20 14.98 25.46 14.96 25.33 14.97
Stressed MCA excess spread analysis

In addition to analyzing expected net losses resulting from nonperforming loans and MCAs, we did a separate analysis
to stress-test excess spread levels of performing MCAs. Given that MCAs have no fixed payment amounts or maturity
dates, they can perform worse than expected without ever violating the merchant's MCA agreement, which would
result in diminished excess spread. Our stress testing considered the extent to which effective spread could diminish if

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actual MCA remittance rates became slower than the expected remittance rates assessed at underwriting (based on
expected merchant sales as assessed by CAN Capital). In applying this stress, we considered the historical MCA
remittance rates for merchants located in regions of the U.S. that experienced the highest levels of economic stresses
(i.e., identified as having higher-than-average unemployment rates). We considered that the diminished excess spread
levels that resulted from our stress testing were substantially higher than the minimum excess spread level of 11% that
we gave credit to in our analysis. This level of credit is based on the level at which the rapid amortization trigger is set,
and the approach is consistent with how other consumer ABS transactions are analyzed when minimum credit
enhancement levels are built into triggers in a revolving structure.
Rating outcome
As discussed, the credit enhancement built into the series 2014-1 transaction includes overcollateralization,
subordination, excess spread, a reserve account, and any available funds on deposit in a cash-trapping account. Credit
enhancement for the class A notes will be 15% and will include 0.50% of funded reserves, 4.5% of overcollateralization,
10% of subordination, and excess spread. Credit enhancement for the class B notes will be 5%.
After giving credit to a minimum excess spread level of 11% in our analysis, we expect credit enhancement including
excess spread to be at least 26% for the class A notes, with at least 16% of credit enhancement for the class B notes.
As discussed, our expected stressed net loss scenarios for the 'A' and 'BBB-' classes are 25.33% and 14.97%,
respectively. Also, while CAN Capital has demonstrated recoveries of about 22% of nonperforming assets, our analysis
does not give any credit to recoveries. At the current levels of credit enhancement, we expect the transaction to
withstand our stressed loss assumptions applicable at the 'A' and 'BBB-' rating levels.
Surveillance
We will maintain surveillance on the rated notes until they mature or are retired. The purpose of surveillance is to
assess on an ongoing basis whether the portfolio is performing within the initial parameters and assumptions applied
for the given rating level. The issuer is required under the transaction documents to supply periodic reports and
notices to Standard & Poor's to maintain continuous surveillance on the rated notes.
Standard & Poor's 17g-7 Disclosure Report

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a credit rating relating to an asset-backed security
as defined in the Rule, to include a description of the representations, warranties, and enforcement mechanisms
available to investors and a description of how they differ from the representations, warranties, and enforcement
mechanisms in issuances of similar securities.
The Standard & Poor's 17g-7 Disclosure Report included in this credit rating report is available at
http://standardandpoorsdisclosure-17g7.com/2748.pdf

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Appendix
Standard & Poor's Small Business Portfolio Evaluator and cash flow results
The Small Business Portfolio Evaluator is an integral part of Standard & Poor's methodology for rating and monitoring
small business securitization transactions. Small Business Portfolio Evaluator is a one-period portfolio default model,
which stochastically simulates default events for each small business (or obligor) using a Gaussian copula framework,
which is a formula for determining correlation. The model aggregates the notional amount of the defaulted assets for
each simulation trial, producing a probability distribution of portfolio default rates. This probability distribution of
default rates describes the likelihood of any particular portfolio default rate occurring. After calculating the probability
distribution, the model derives a set of SDRs. The model uses these SDRs as a factor in determining the assumed gross
level of asset defaults for each credit rating. We generally would expect that a tranche with that rating should be able
to withstand the relevant assumed gross level of asset defaults consistent with our rating criteria.
Standard & Poor's rating

The Standard & Poor's rating is the public rating, which is typically the issuer credit rating.
Scenario default rate

The SDR is the minimum level of portfolio defaults that each tranche must withstand to support the specific rating
level using Standard & Poor's Small Business Portfolio Evaluator. (See the Standard & Poor's Small Business Portfolio
Evaluator and cash flow results subsection earlier in the appendix for more information.)
Subordination
Subordination is calculated as the notes' total face amount (including the subordinated notes) that have payment
priorities subordinate to the assessed class of notes divided by the notes' total face amount (including the subordinated
notes).
Target portfolio
The target portfolio consists of collateral that has already been purchased and/or collateral for which a commitment to
purchase has been initiated, as well as hypothetical portfolio information that the arrangers present to Standard &
Poor's for its rating analysis.
Related Criteria and Research

Related Criteria
• Request For Comment: Global Framework for Assessing Operational Risk In Structured Finance
Transactions--Update, May 8, 2014
• Methodology And Assumptions For U.S. Small Business Loan-Backed Securitizations, March 28, 2014
• Counterparty Risk Framework Methodology And Assumptions, June 25, 2013
• Asset Isolation And Special–Purpose Entity Criteria--Structured Finance, May 7, 2013
• Criteria Methodology Applied To Fees, Expenses, And Indemnifications, July 12, 2012
• Global Investment Criteria For Temporary Investments In Transaction Accounts, May 31, 2012
• Principles Of Credit Ratings, Feb. 16, 2011

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• Credit Stability Criteria, May 3, 2010

• Understanding Standard & Poor's Ratings Definitions, June 3, 2009
• Legal Criteria For U.S. Structured Finance Transactions: Special-Purpose Entities, Oct. 1, 2006

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CAN Capital Funding LLC

U.S. Structured Credit New Issuance:

$191 million fixed-rate asset-backed notes series 2014-1

Company Background And Product Information

Originations And Underwriting

WWW.STANDARDANDPOORS.COM/RATINGSDIRECT OCTOBER 1, 2014 1

Pool And Structural Characteristics

Payment Structure And Cash Flow Mechanics

Stressed Portfolios And The Small Business Portfolio Evaluator

Standard & Poor's 17g-7 Disclosure Report

Related Criteria and Research

WWW.STANDARDANDPOORS.COM/RATINGSDIRECT OCTOBER 1, 2014 2

Preliminary Ratings As Of Oct. 1, 2014

(i) The rating is preliminary and subject to change at any time.

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WWW.STANDARDANDPOORS.COM/RATINGSDIRECT OCTOBER 1, 2014 4

Company Background And Product Information

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about $800 million (48%).

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Originations And Underwriting

• Merchant profile (i.e., business sector and region);

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WWW.STANDARDANDPOORS.COM/RATINGSDIRECT OCTOBER 1, 2014 8

Warm backup servicing

Hot backup servicing

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Pool And Structural Characteristics

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2014-1 pool composition as of the statistical cut-off date

Top industry concentrations

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Top state concentrations

Structural payment triggers

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Payment Structure And Cash Flow Mechanics

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WWW.STANDARDANDPOORS.COM/RATINGSDIRECT OCTOBER 1, 2014 14

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Stressed Portfolios And The Small Business Portfolio Evaluator

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SBA--U.S. Small Business Association.

LTV--Loan-to-value. DSCR--Debt service coverage ratio.

Stressed case default analysis

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Conversion of SDRs into net losses

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(%) 'A' 'BBB-' 'A' 'BBB-' 'A' 'BBB-'

Stressed MCA excess spread analysis

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Standard & Poor's 17g-7 Disclosure Report

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Standard & Poor's rating

Scenario default rate

Related Criteria and Research

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• Credit Stability Criteria, May 3, 2010

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