Newtek Capital Acquires Exponential Business Development Company, Inc.

    NEW YORK, Jan. 10 /PRNewswire-FirstCall/ --
 Newtek Capital, Inc. (Amex:   NKC), a specialist in acquiring, developing and
 operating early stage high growth businesses, announced today that it has
 acquired Exponential Business Development Company, Inc. ("Exponential"), a
 venture capital firm located in Syracuse and Albany, New York.  Exponential
 invests exclusively in early stage businesses located in the Upstate New York
 region, and operates through a number of investment vehicles including a
 certified capital company ("CAPCO").  The acquisition of Exponential continues
 Newtek's plan to make strategic acquisitions, broadening its comprehensive
 coverage and strengthening its entrepreneurial resources.
     Exponential's six principals, all successful entrepreneurs committed to
 managing and developing businesses in this region include: Dirk Sonneborn,
 formerly with Coopers & Lybrand, who is and will remain Chief Executive of
 Exponential; Jeffrey Solomon, former Chairman of Paul-Jeffrey Company, a
 company specializing in distribution of consumer products, who has over 30
 years of experience in the field of logistics, with expertise in productivity
 and cost control; Michael Marvin, Co-Chairman of MapInfo, Inc. a software
 development company founded in 1986, who has had responsibility for creating
 strategic technology alliances with Fortune 500 companies and others and has
 assisted in the formulation of dozens of strategic plans for early stage
 companies; Paul Solomon, a 30-year expert in the field of logistics and
 marketing with an expertise in implementing sales strategies, who is former
 President of Paul-Jeffrey Company; Robert Godgart, Chairman of AutoTask Group,
 a software development company specializing in business management solutions
 for project-driven companies and former Chairman of Image Systems and
 Technology Company, a Troy, New York-based software company acquired by
 Softdesk, Inc. in 1994, and; Lawrence Wetzel, co-founder of Clean Room
 Technology, Inc. and currently Chairman of Air Innovations, Inc. and CleanRoom
 Systems Inc., designers and manufacturers of air control and conditioning
 equipment, with extensive experience in manufacturing and the construction
 industry. Each of the six principals has a multi-year agreement to continue
 working with Exponential.
     Since inception, Exponential has made first round investments in over 30
 early stage businesses, including ReQuest Multimedia, Vicarious Visions and
 Blue Slate Solutions.  Exponential has since 1998, operated a CAPCO, similar
 to the seven operated by Newtek in New York and other states.  Exponential and
 its principals take an active role in assisting its portfolio companies.
 ReQuest Multimedia (http://www.request.com), located in Troy, New York, was
 founded in 1998 and is an industry leader in the storage and retrieval of
 digital multimedia.  Request recently won the CEDIA 2001 Electronic Lifestyles
 Award for Best New Audio Product.
     Vicarious Visions, Inc. (http://www.vvisions.com), also located in Troy,
 New York, is a creator of game software for all mass-market electronic
 entertaining platforms.  The company is a premier creator of handheld and
 video game software, with hit titles such as Tony Hawk's Pro Skater 2 for the
 Game Boy Advance, Spider-Man 2: Enter Electro for Sony PlayStation, Power
 Rangers Time Force and ESPN Winter-X Games.
     Blue Slate Solutions (http://www.blueslate.net) was founded in June of
 2000 and is located in Albany, New York.  Blue Slate is a consulting firm with
 expertise in finance, marketing and planning that provides business strategy
 and technology solutions to established businesses that are launching new
 ventures as well as emerging growth companies.  Clients range from pure-play
 Internet ASPs to mid-market manufacturing companies to members of the Fortune
 500.
     Barry Sloane, Chairman and CEO of Newtek Capital, stated: "We are very
 excited about expanding our presence in Upstate New York.  This acquisition
 gives Newtek and its Wilshire Group and Exponential brands complete coverage
 across New York State when added to our existing presence in Buffalo,
 Manhattan and Long Island.  In addition, the six principals of Exponential
 bring powerful and distinctive skills with high individual visibility in the
 Upstate New York markets.  We anticipate capitalizing upon Exponential's
 financial relationships for alternative funding which will expand our current
 business lines."
     Mr. Sonneborn commented: "Joining Newtek is an important strategic step
 for Exponential, our investors, our current portfolio companies and for the
 entire Upstate New York entrepreneurial community.  Access to Newtek's
 resources will enable us to increase business financings and invest in more
 entrepreneurial businesses in the years to come.  It will also enable us to
 extend the products and services of other Newtek companies to small businesses
 throughout the region.  The continued commitment of the principals in this
 market makes this a win-win-win relationship."
 
     Newtek Capital, Inc. (http://www.newtekcapital.com) creates significant
 non-dilutive capital through the operation of seven CAPCOs in four states.
 Since 1998, Newtek has raised more than $119 million of certified capital and
 has made investments in 33 companies, 12 majority-owned or primarily
 controlled partner companies and investments in 21 other businesses.  Newtek's
 portfolio of partner companies includes Transworld Business Brokers, Inc.,
 Direct Creations, LLC, Starphire Technologies, LLC, NicheDirectories, LLC,
 Group Management Technologies, LLC, Harvest Strategies, LLC, and Universal
 Processing Services, LLC.  Newtek operates as a holding company for a network
 of partner companies in a collaborative and coordinated effort to develop
 successful businesses in a number of emerging and technological areas.
 
     The statements in this release may contain forward-looking statements
 relating to such matters as anticipated future financial performance, business
 prospects and results, and similar matters.  The Private Securities Reform Act
 of 1995 provides a safe harbor for forward-looking statements.  In order to
 comply with the terms of the safe harbor, the Company notes that a variety of
 factors could cause the Company's actual results to differ materially from the
 anticipated results expressed in the Company's forward looking statements such
 as intensified competition and/or operating problems in its operating business
 projects and their impact on revenues and profit margins The Company also
 notes that overall profitability could be materially effected by economic
 conditions and unanticipated developments in the economy generally and  in the
 core businesses of our partner companies.
 
      Contact:
      Barry Sloane
      Chairman of the Board & CEO
      Newtek Capital, Inc.
      212-826-9022
      bsloane@newtekcapital.com
 
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SOURCE Newtek Capital, Inc.

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