| Schedule of servicing assets |
The following table summarizes the unpaid principal balance of loans serviced at June 30, 2026 and December 31, 2025: | | | | | | | | | | | | | June 30, 2026 | | December 31, 2025 | SBA 7(a) | $ | 1,598,679 | | | $ | 1,698,866 | | ALP | 643,809 | | | 345,856 | | | 504 | 48,134 | | | 48,302 | | Total loans serviced | $ | 2,290,622 | | | $ | 2,093,024 | |
| | | | | | | | | | | | | Servicing Assets, at LCM | June 30, 2026 | | June 30, 2025 | Balance at beginning of the period | $ | 29,564 | | | $ | 24,195 | | Amortization1 | (8,544) | | | (4,329) | | Additions2 | 18,480 | | | 11,965 | | Impairment assessment | — | | | — | | Balance at end of the period | $ | 39,500 | | | $ | 31,831 | |
1 Included within Net loss on loan servicing assets in the Consolidated Statements of Income 2 Included within Net gains on sales of loans in the Consolidated Statements of Income
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| Fair value and valuation assumption |
The following table summarizes the fair value and valuation assumptions related to servicing assets at June 30, 2026 and December 31, 2025: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2026 | | December 31, 2025 | | | | | Weighted | | Range | | | | Weighted | | Range | | Unobservable Input | | Amount | | Average | | Minimum | | Maximum | | Amount | | Average | | Minimum | | Maximum | Servicing assets at FV: | | $ | 12,456 | | | | | | | | | $ | 15,358 | | | | | | | | Discount factor1 | | | | 11.25 | % | | 11.25 | % | | 11.25 | % | | | | 11.25 | % | | 11.25 | % | | 11.25 | % | | Cumulative prepayment rate | | | | 22.50 | % | | 22.50 | % | | 22.50 | % | | | | 22.50 | % | | 22.50 | % | | 22.50 | % | | Average cumulative default rate | | | | 21.00 | % | | 21.00 | % | | 21.00 | % | | | | 21.00 | % | | 21.00 | % | | 21.00 | % | Servicing assets at LCM: | | 39,500 | | | | | | | | | 29,564 | | | | | | | | Discount factor1 | | | | 10.67 | % | | 10.25 | % | | 11.25 | % | | | | 11.27 | % | | 10.75 | % | | 12.00 | % | | Cumulative prepayment rate | | | | 32.90 | % | | 22.50 | % | | 50.00 | % | | | | 33.72 | % | | 22.50 | % | | 50.00 | % | | Average cumulative default rate | | | | 17.31 | % | | 5.00 | % | | 21.00 | % | | | | 16.95 | % | | 5.00 | % | | 21.00 | % | Total | | $ | 51,956 | | | | | | | | | $ | 44,922 | | | | | | | |
1 Determined based on risk spreads and observable secondary market transactions. The following tables provide a summary of quantitative information about the Company’s Level 3 fair value measurements as of June 30, 2026 and December 31, 2025. In addition to the inputs noted in the table below, according to our valuation policy we may also use other valuation techniques and methodologies when determining our fair value measurements. The tables below are not intended to be all-inclusive but rather provide information on the significant Level 3 inputs as they relate to the Company’s fair value measurements at June 30, 2026 and December 31, 2025.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fair Value as of | | | | Weighted | | Range | | | June 30, 2026 | | Unobservable Input | | Average | | Minimum | | Maximum | | Assets: | | | | | | | | | | | Loans HFI, at FV - accrual | | $ | 611,953 | | | Market yields | | 5.57 | % | | 5.40 | % | | 6.00 | % | | | | | Cumulative prepayment rate | | 22.50 | % | | 22.50 | % | | 22.50 | % | | | | | Average cumulative default rate | | 21.00 | % | | 21.00 | % | | 21.00 | % | Loans HFI, at FV - non-accrual | | $ | 109,615 | | | Market yields | | 7.26 | % | | 7.00 | % | | 8.59 | % | | | | | | | | | | | | | | | | Average cumulative default rate | | 30.00 | % | | 30.00 | % | | 30.00 | % | Loans HFS, at FV | | $ | 500,783 | | | Market yields | | 7.66 | % | | 6.89 | % | | 9.04 | % | | | | | Cumulative prepayment rate | | 54.82 | % | | 50.00 | % | | 60.00 | % | | | | | Average cumulative default rate | | 9.82 | % | | 5.00 | % | | 15.00 | % | | Joint ventures and other investments | | $ | 36,806 | | | Market yields | | 8.15 | % | | 8.09 | % | | 8.59 | % | | | | | Cost of equity | | 14.00 | % | | 12.00 | % | | 16.00 | % | | | | | Weighted average cost of capital | | 8.00 | % | | 6.00 | % | | 10.00 | % | | Residuals in securitizations, at FV | | $ | 204,001 | | | Market yields | | 8.11 | % | | 8.09 | % | | 8.59 | % | | | | | Cost of equity | | 14.00 | % | | 12.00 | % | | 16.00 | % | | | | | Weighted average cost of capital | | 8.00 | % | | 6.00 | % | | 10.00 | % | | Servicing assets, at FV | | $ | 12,456 | | | Market yields | | 11.25 | % | | 11.25 | % | | 11.25 | % | | | | | Cumulative prepayment rate | | 22.50 | % | | 22.50 | % | | 22.50 | % | | | | | Average cumulative default rate | | 21.00 | % | | 21.00 | % | | 21.00 | % | Liabilities: | | | | | | | | | | | Equity warrants | | $ | 168 | | | Expected volatility | | 45.00 | % | | 45.00 | % | | 45.00 | % | | | | | Dividend yield | | 6.70 | % | | 6.70 | % | | 6.70 | % | | | | | Risk free rate | | 3.95 | % | | 3.95 | % | | 3.95 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fair Value as of | | | | | | Weighted | | Range | | | December 31, 2025 | | | | Unobservable Input | | Average | | Minimum | | Maximum | | Assets: | | | | | | | | | | | | | Loans HFI, at FV - accrual | | $ | 208,655 | | | | | Market yields | | 6.55 | % | | 6.55 | % | | 6.55 | % | | | | | | | Cumulative prepayment rate | | 22.50 | % | | 22.50 | % | | 22.50 | % | | | | | | | Average cumulative default rate | | 21.00 | % | | 21.00 | % | | 21.00 | % | Loans HFI, at FV - non-accrual | | $ | 72,543 | | | | | Market yields | | 7.00 | % | | 7.00 | % | | 7.00 | % | | | | | | | | | | | | | | | | | | | | Average cumulative default rate | | 30.00 | % | | 30.00 | % | | 30.00 | % | Loans HFS, at FV | | $ | 647,370 | | | | | Market yields | | 7.19 | % | | 6.43 | % | | 8.13 | % | | | | | | | Cumulative prepayment rate | | 56.17 | % | | 50.00 | % | | 60.00 | % | | | | | | | Average cumulative default rate | | 11.17 | % | | 5.00 | % | | 15.00 | % | | Joint ventures and other investments | | $ | 38,856 | | | | | Market yields | | 7.40 | % | | 6.71 | % | | 12.49 | % | | | | | | | Cost of equity | | 14.00 | % | | 12.00 | % | | 16.00 | % | | | | | | | Weighted average cost of capital | | 9.00 | % | | 7.00 | % | | 11.00 | % | | | | | | | | | | | | | | | Residuals in securitizations, at FV | | $ | 76,701 | | | | | Market yields | | 7.58 | % | | 7.58 | % | | 7.58 | % | | | | | | | Cost of equity | | 14.00 | % | | 12.00 | % | | 16.00 | % | | | | | | | Weighted average cost of capital | | 9.00 | % | | 7.00 | % | | 11.00 | % | | Servicing assets, at FV | | $ | 15,358 | | | | | Market yields | | 11.25 | % | | 11.25 | % | | 11.25 | % | | | | | | | Cumulative prepayment rate | | 22.50 | % | | 22.50 | % | | 22.50 | % | | | | | | | Average cumulative default rate | | 21.00 | % | | 21.00 | % | | 21.00 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Liabilities: | | | | | | | | | | | | | | Equity warrants | | $ | 81 | | | | | Expected volatility | | 45.00 | % | | 45.00 | % | | 45.00 | % | | | | | | | Dividend yield | | 6.70 | % | | 6.70 | % | | 6.70 | % | | | | | | | Risk free rate | | 3.95 | % | | 3.95 | % | | 3.95 | % |
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| Schedule of servicing fee income |
Servicing income earned for the three and six months ended June 30, 2026 and 2025 was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | | 2026 | | 2025 | | 2026 | | 2025 | | | Servicing income | $5,003 | | $6,054 | | $11,388 | | $11,579 | | |
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