CALGARY, ALBERTA--(Marketwired - Oct. 13, 2016) - Founders Advantage Capital Corp. (TSX VENTURE:FCF) (the
"Corporation") owns a 60% interest in Dominion Lending Centres ("DLC"). With the recent changes to the mortgage rules by the
Federal Government, we have asked DLC to comment on the new rules and the anticipated effect on DLC. DLC is not a lender and
does not itself offer mortgages but does offer mortgage brokerage services, whereby it assists consumers in obtaining and
negotiating new mortgages and mortgage renewals.
"The new mortgage rules announced by the Federal Government on October 3, 2016 caught the entire industry by surprise and we
continue to assess the potential impacts of these changes", said Gary Mauris, President of Dominion Lending Centres. "Our
current view is that the new rules will make it more difficult and more costly for many Canadians to obtain a mortgage. In turn,
this should result in more Canadians using a mortgage broker as we have access to hundreds of lenders who can provide the right
mortgage product at the best rate."
DLC published a three-page guide to the new rules entitled, "Change of Space: The New Mortgage Rules". This guide serves to
educate clients on the policy revisions and most of all, how DLC can assist in navigating these ongoing changes. A copy of this
guide can be found on the Corporation's website.
"In short, we do not believe the new rules will have a significant long-term effect on DLC's revenue", Mr. Mauris continued.
"Historically, DLC has proven to maintain its revenue in tougher economic times and has used such periods to add franchisees and
mortgage brokers. For example, with the recent economic challenges in Alberta, we compared the revenue for all active franchisees
in Alberta through the current recession and concluded revenues for such franchisees was flat, notwithstanding a significant
decline in total home sales. We will continue to assess the impact of the new mortgage rules but do not believe this will
materially impact our business. Further, after speaking with senior officials in the Federal Government, we anticipate they may
still amend many of the new rules in response to industry and consumer feedback."
The Corporation is pleased to announce that DLC has been approved for an additional $4.0 million revolving credit facility to
fund the onboarding or acquisition of additional mortgage brokerage firms and mortgage brokers. In more challenging economic
times, DLC has historically been able to onboard additional brokers as individuals are more inclined to join a larger more
established organization. DLC has onboarded more mortgage brokers in the current year than it has in any other comparable
period of its history. The increased credit facility bears interest at a rate equal to the Bank of Canada prime rate plus
1.5%. The additional credit facility will allow DLC to fund its acquisitions without negatively impacting its cash flow.
About Founders Advantage Capital Corp.
The Corporation is listed on the TSX Venture Exchange as an Investment Issuer (Tier 1) and employs a permanent investment
approach. The Corporation has developed an investment approach to create long-term value for its shareholders and partner
entrepreneurs (investees) by pursuing majority interest acquisitions of cash flow positive middle-market privately held entities.
The Corporation seeks to win mandates by appealing to the segment of the market which is not aligned with traditional private
equity control, royalty monetizations or related structures. The Corporation's innovative platform offers disproportionate
incentives (contractually) for growth in favour of our partner entrepreneurs. This unique platform is designed to appeal to
entrepreneurs who believe in the growth of their businesses and who want the added ability to continue to manage the business
with a long-term partner.
The Corporation's common shares are listed on the TSX Venture Exchange under the symbol "FCF".
For further information please refer to the Corporation's website at www.advantagecapital.ca.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX
VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Caution concerning forward-looking information
This news release or documents referred to herein contain "forward-looking information" and "forward-looking statements"
within the meaning of applicable securities laws, including statements regarding the potential impact of the new mortgage rules
on DLC's operations, the increased use of mortgage brokers in more difficult economic times, the anticipated amendments to the
new mortgage rules and the ability of DLC to acquire additional mortgage brokers. These information and statements address future
activities, events, plans, developments and projections. All statements, other than statements of historical fact, constitute
forward-looking statements or forward-looking information. Such forward-looking information and statements are frequently
identified by words such as "may", "will", "should", "anticipate", "plan", "expect", "believe", "estimate", "intend" and similar
terms, and reflect assumptions, estimates, opinions and analysis made by management in light of its experience, current
conditions, expectations of future developments and other factors which it believes to be reasonable and relevant.
Forward-looking information and statements involve known and unknown risks and uncertainties that may cause actual results,
performance and achievements to differ materially from those expressed or implied by the forward-looking information and
statements and, accordingly, undue reliance should not be placed thereon. Risks and uncertainties that may cause actual results
to vary include, the new mortgage rules adversely impacting DLC's operations in ways not yet contemplated, increased competition
for mortgage brokers by large firms, as well as other risks and uncertainties which are more fully described in our Annual
Information Form and in other filings made by us with Canadian securities regulatory authorities and available at www.sedar.com. The Corporation disclaims any obligation to update or revise any
forward-looking information or statements except as may be required by applicable law.