SLR Equipment Finance

3 Months Ended

Mar. 31, 2023

Schedule of Equity Method Investments [Line Items]

SLR Equipment Finance

Note 13. Kingsbridge Holdings, LLC

On November 3, 2020, the Company acquired 87.5% of the equity securities of Kingsbridge Holdings, LLC (“KBH”) through KBH Topco LLC (“KBHT”), a Delaware corporation. KBH is a residual focused independent mid-ticket lessor of equipment primarily to U.S. investment grade companies. The Company invested $216,596 to effect the transaction, of which $136,596 was invested to acquire 87.5% of KBHT’s equity and $80,000 in KBH’s debt. The existing management team of KBH committed to continuing to lead KBH after the transaction. Following the transaction, the Company owns 87.5% of KBHT equity and the KBH management team owns the remaining 12.5% of KBHT’s equity.

As of March 31, 2023 and December 31, 2022, KBHT had total assets of $778,489 and $777,151, respectively. For the same periods, debt recourse to KBHT totaled $225,119 and $222,094, respectively, and non-recourse debt totaled $360,090 and $353,128, respectively. None of the debt is recourse to the Company. For the three months ended March 31, 2023 and 2022, KBHT had net income of $2,627 and $3,399, respectively, on gross income of $68,007 and $66,426, respectively. Due to timing and non-cash items, there may be material differences between GAAP net income and cash available for distributions. As such, and subject to fluctuations in KBHT’s funded commitments, the timing of originations, and the repayments of financings, the Company cannot guarantee that KBHT will be able to maintain consistent dividend payments to us.

SLR Equipment Finance [Member]

Schedule of Equity Method Investments [Line Items]

SLR Equipment Finance

Note 11. SLR Equipment Finance

On July 31, 2017, we acquired a 100% equity interest in NEF Holdings, LLC, which conducts its business through its wholly-owned subsidiary Nations Equipment Finance, LLC. Effective February 25, 2021, Nations Equipment Finance, LLC and its related companies are doing business as SLR Equipment Finance (“SLR Equipment”). SLR Equipment is an independent equipment finance company that provides senior secured loans and leases primarily to U.S. based companies. We invested $209,866 in cash to effect the transaction, of which $145,000 was invested in the equity of SLR Equipment through our wholly-owned consolidated taxable subsidiary NEFCORP LLC and our wholly-owned consolidated subsidiary NEFPASS LLC and $64,866 was used to purchase certain leases and loans held by SLR Equipment through NEFPASS LLC. Concurrent with the transaction, SLR Equipment refinanced its existing senior secured credit facility into a $150,000 non-recourse facility with an accordion feature to expand up to $250,000. In September 2019, SLR Equipment amended the facility, increasing commitments to $213,957 with an accordion feature to expand up to $313,957 and extended the maturity date of the facility to July 31, 2023.

As of March 31, 2023, SLR Equipment had 129 funded equipment-backed leases and loans to 53 different customers with a total net investment in leases and loans of approximately $188,633 on total assets of $236,635. As of December 31, 2022, SLR Equipment had 131 funded equipment-backed leases and loans to 59 different customers with a total net investment in leases and loans of approximately $190,830 on total assets of $241,813. As of March 31, 2023 and December 31, 2022, the largest position outstanding totaled $19,259 and $19,259, respectively. For the same periods, the average exposure per customer was $3,559 and $3,234, respectively. SLR Equipment’s credit facility, which is non-recourse to the Company, had approximately $113,132 and $114,977 of borrowings outstanding at March 31, 2023 and December 31, 2022, respectively. For the three months ended March 31, 2023 and March 31, 2022, SLR Equipment had net income of $1,038 and $594, respectively, on gross income of $6,337 and $5,173, respectively. Due to timing and non-cash items, there may be material differences between GAAP net income and cash available for distributions.