v3.25.2
Borrowings
 6 Months Ended
Jun. 30, 2025
Borrowings [Abstract]  
Borrowings
Note 7. Borrowings

On July 2, 2021, the Company entered into a Loan and Servicing Agreement (the “Loan Agreement”) with Sterling National Bank (“SNB”), which provides for a $55 million senior secured revolving credit facility (“Secured Credit Facility”). In February 2022, SNB was subsequently acquired by Webster Bank (“Webster”), which took over the relationship with the Company. On January 12, 2022, the Company entered into a second amendment to the Secured Credit Facility to upsize the Secured Credit Facility to $80 million. On May 6, 2022, the Company entered into an amendment to the Secured Credit Facility to upsize the Secured Credit Facility to $125 million. On September 16, 2022, the Company entered into an amendment to the Secured Credit Facility to upsize the Secured Credit Facility to $200 million. On May 9, 2024, the Company entered into an amendment to the Secured Credit Facility to reassign commitment amounts and negotiate Secured Credit Facility fees.

In May 2024, the Company extended its $200,000,000 Secured Credit Facility with Webster, the Administrative Agent, to June 30, 2028. The Secured Credit Facility carries an interest rate of 3M SOFR plus 2.9%. On June 27, 2025, the Company entered into an amendment to the Secured Credit Facility to reduce the Applicable Spread to 2.30%, plus following the occurrence and during the continuation of an Event of Default, 2.00%.

As of June 30, 2025 and December 31, 2024, the Secured Credit Facility commitment amounts were as follows:

   
As of June 30, 2025
    
As of December 31, 2024
  
Secured Credit Facility Lender
  
Commitment
    
Commitment
  
Webster Bank
  
$
67,500,000
    
$
67,500,000
  
Dime Community Bank
     25,000,000
      25,000,000
 
First Foundation Bank
    
20,000,000
      
20,000,000
  
Mitsubishi HC Capital America, Inc.
    
20,000,000
      
20,000,000
  
Woodforest National Bank
    
20,000,000
      
20,000,000
  
Peapack-Gladstone Bank
    17,000,000
       17,000,000
  
Hanmai Bank
    
15,500,000
      
15,500,000
  
Apple Bank
    
15,000,000
      
15,000,000
  
Total Commitment
  
$
200,000,000
    
$
200,000,000
  
 
Borrowings can be increased to a maximum of $350 million in accordance with the Secured Credit Facility accordion feature terms and conditions and are limited by various advance rates and concentration limits.

As of June 30, 2025 and December 31, 2024, the total fair value of the borrowings outstanding under the Secured Credit Facility was $108,700,000 and $122,500,000, respectively. The fair value of the borrowings outstanding under the Secured Credit Facility is based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

Inclusive of syndication, agency, and administrative fees paid to Webster, the total annualized cost of capital is estimated to be 8.0%. The Company will also pay a non-utilization fee on the average daily unused amount of the aggregate commitments until the commitment termination date (as defined in the Loan Agreement). As of June 30, 2025, the total commitments under the Secured Credit Facility were $200 million. Proceeds from borrowings under the Secured Credit Facility may be used to finance certain investments, fulfill payment obligations under the Secured Credit Facility, make distributions/payments permitted by the Loan Agreement. All amounts outstanding under the Secured Credit Facility must be repaid by June 30, 2028. The Company’s obligations to the lenders under the Secured Credit Facility are secured by a first priority security interest in substantially all of the Company’s assets, subject to certain exclusions.

Borrowings under the Secured Credit Facility are limited by various advance rates and concentration limits. In connection with the Secured Credit Facility, the Company has made certain customary representations/warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. The Secured Credit Facility is subject to customary events of default for similar financing transactions. Upon the occurrence and during the continuation of an event of default, Webster may declare the outstanding advances and all other obligations under the Secured Credit Facility immediately due and payable.

The components of the Company’s interest expense and other debt financing expenses, average outstanding balances and average stated interest rates (i.e. the rate in effect plus spread) were as follows:

   
For the three months ended June 30,
  
 
   2025
     2024
  
Interest expense - Secured Credit Facility
  
$
2,208,438
    
$
2,954,331
  
Unused commitment fees
    
98,859
      
71,160
  
Amortization of deferred financing costs
    
170,350
      
144,398
  
Administration fees
    
(1,179,104
)
    
193,421
  
Total interest and other debt financing fees
  
$
1,298,543
    
$
3,363,310
  
Average debt outstanding
  
$
121,781,319
    
$
143,697,802
  
Average stated interest rate
    
7.27
%
    
8.25
%

   
For the six months ended June 30,
  
   
2025
    
2024
  
Interest expense - Secured Credit Facility
  
$
4,377,859
    
$
6,242,500
  
Unused commitment fees
    
198,423
      
118,847
  
Amortization of deferred financing costs
    
307,750
      
284,919
  
Administration fees
    
(1,043,712
)
    
458,235
  
Total interest and other debt financing fees
  
$
3,840,320
    
$
7,104,501
  
Average debt outstanding
  
$
121,069,061
    
$
152,983,516
  
Average stated interest rate
    
7.29
%
    
8.18
%