FMAC Reports Financing Line Renewals and Estimates of Fourth Quarter Losses.

LOS ANGELES--(BUSINESS WIRE)--Jan. 6, 1999--Franchise Mortgage Acceptance Company (FMAC) (NASDAQ: FMAX) announced today the renewal of certain of its financing lines of credit and expected fourth quarter 1998 losses.

At the end of December 1998, FMAC completed the renewal of a $300 million warehouse line of credit with Credit Suisse First Boston to December 20, 1999, and a $300 million warehouse line of credit with Morgan Stanley to December 30, 1999. FMAC also recently extended its warehouse line of credit with Residential Funding Corporation for $100 million to September 30, 1999, and has additional warehouse lines of credit, repurchase facilities and working capital lines totaling approximately $225 million, with various expiration dates from April 30, 1999 to August 31, 1999.

FMAC also announced the estimated $0.35 to $0.39 per share net loss it expects to record for its fourth quarter ending December 31, 1998, primarily resulting from recognition of hedge position of approximately $23 million (an estimated $0.48 per share). These losses were materially sustained as a result of market aberrations which commenced late in the third quarter of 1998. A significant portion of the hedge losses were recognized as a part of the sale of loans in the fourth quarter. The remaining deferred hedge losses will be recognized as a "lower of cost or market" adjustment to the loans held for sale.

"The recent volatility of the market has presented unprecedented challenges for the entire lending industry," commented FMAC's CEO Wayne Knyal, "FMAC was no exception. We are pleased by the confidence shown by our bankers' renewal of our lines of credit and that at the end of the year we will not have any deferred hedge loss remaining. Our management team will continue to focus our efforts on our most profitable lines of business as we surge on into 1999."

FMAC, founded in 1991, is a specialty commercial finance company engaged in the business of originating and servicing loans and equipment leases to small businesses, with a primary focus on established national and regional franchise concepts and multi-family apartment operators. The Los Angeles-based company has provided more than $5 billion in customer financing and has enabled investor participation through 15 securitizations of pooled loans totaling more than $2.4 billion. The company's servicing portfolio is currently $5.2 billion. FMAC has regional offices in Atlanta, Dallas, Denver, Greenwich, Newport Beach and Parsippany, N.J., with local offices in several other states across the country.

Certain statements contained herein are "forward-looking" statements within the meaning of applicable federal securities laws. These forward-looking statements may be identified by reference to a future period(s) or by the use of forward-looking terminology, such as "may," "will," "intend," "should," "expect," "anticipate," "estimate," or "continue" or other comparable terminology. FMAC's actual results could differ materially from those anticipated in such forward-looking statements due to a variety of factors, including, but not limited to, changes in national, regional or local economic environments, competitive products and pricing, government fiscal and monetary policies, changes in prevailing interest rates, other factors generally understood to affect franchise, mortgage and leasing markets and security investments, as well as the other risks detailed in the Company's Form 10-K for the period ended December 31, 1997 and other filings with the Securities and Exchange Commission.

Editor's Note: For more information, interested parties should contact Raedelle Walker, FMAC's Chief Financial Officer, at 310-229-2619 or access FMAC's Website at http://www.fmax.com.