8.	Notes Payable

The Company contributes certain receivables to VIEs. These entities are established to facilitate a more efficient means of obtaining

third

party financing. When assets are contributed to the VIE, they serve as collateral for the debt securities issued by the VIE. The evaluation of whether the entity qualifies as a VIE is based upon the sufficiency of the equity at risk in the legal entity. This evaluation is generally a function of the level of excess collateral in the legal entity. We consolidate VIEs when we hold a variable interest and are the primary beneficiary. We are the primary beneficiary when we have the power to direct activities that most significantly affect the economic performance and have the obligation to absorb the majority of the losses or benefits. In certain circumstances we guarantee the performance of the underlying debt or agree to contribute additional collateral when necessary. When collateral is pledged it is

not

available for the general use of the Company and can only be used to satisfy the related debt obligation. The results of operations and financial position of consolidated VIEs are included in our consolidated financial statements.

The following table presents a summary of VIEs in which we had continuing involvement or held a variable interest (in millions):

	As of
	March 31, 2019			December 31, 2018
Unrestricted cash and cash equivalents	$	41.1		$	16.8
Restricted cash and cash equivalents	$	45.7		$	61.0
Loans, interest and fees receivable, at fair value	$	4.8		$	5.7
Loans, interest and fees receivable, gross	$	453.1		$	403.4
Allowances for uncollectible loans, interest and fees receivable	$	(76.5	)	$	(57.4	)
Deferred revenue	$	(16.9	)	$	(13.2	)
Total Assets held by VIEs	$	451.3		$	416.3
Notes Payable, at face value held by VIEs	$	382.4		$	366.7
Notes Payable, at fair value held by VIEs	$	4.8		$	5.7
Maximum exposure to loss due to involvement with VIEs	$	454.5		$	438.5

Notes Payable Associated with Structured Financings, at Fair Value

Scheduled (in millions) in the table below are (

) the carrying amount of our structured financing note secured by certain credit card receivables and reported at fair value as of

March 31, 2019

and

December

31,

2018,

(

) the outstanding face amount of our structured financing note secured by certain credit card receivables and reported at fair value as of

March

31,

2019

and

December

31,

2018,

and (

) the carrying amount of the credit card receivables and restricted cash that provide the exclusive means of repayment for the note (i.e., lenders have recourse only to the specific credit card receivables and restricted cash underlying each respective facility and cannot look to our general credit for repayment) as of

March

31,

2019

and

December

31,

2018.

	Carrying Amounts at Fair Value as of
	March 31, 2019		December 31, 2018
Securitization facility (stated maturity of December 2021), outstanding face amount of $101.3 million as of March 31, 2019 ($101.3 million as of December 31, 2018) bearing interest at a weighted average 7.5% interest rate, based upon LIBOR, at March 31, 2019 (7.5% at December 31, 2018), which is secured by credit card receivables and restricted cash aggregating $4.8 million as of March 31, 2019 ($5.7 million as of December 31, 2018) in carrying amount	$	4.8	$	5.7

Contractual payment allocations within this credit card receivables structured financing provide for a priority distribution of cash flows to us to service the credit card receivables, a distribution of cash flows to pay interest and principal due on the notes, and a distribution of all excess cash flows (if any) to us. The structured financing facility included in the above table is amortizing down along with collections of the underlying receivables and there are

provisions within the debt agreement that allow for acceleration or bullet repayment of the facility prior to its scheduled expiration date. The aggregate carrying amount of the credit card receivables and restricted cash that provide security for the

$4.8

million in fair value of the structured financing facility included in the above table is

$4.8

million, which means that we have

aggregate exposure to pre-tax equity loss associated with the above structured financing arrangement at

March

31,

2019.

As discussed elsewhere, the legal entity holding the securitization facility discussed in the table above, is a VIE. Beyond our role as servicer of the underlying assets within the credit cards receivables structured financing, we have provided

other financial or other support to the structure, and we have

explicit or implicit arrangements that could require us to provide financial support to the structure.

Notes Payable, at Face Value and Notes Payable to Related Parties

Other notes payable outstanding as of

March

31,

2019

and

December

31,

2018

that are secured by the financial and operating assets of either the borrower, another of our subsidiaries or both, include the following, scheduled (in millions); except as otherwise noted, the assets of our holding company (Atlanticus Holdings Corporation) are subject to creditor claims under these scheduled facilities:

	As of
	March 31, 2019			December 31, 2018
Revolving credit facilities at a weighted average interest rate equal to 7.7% at March 31, 2019 (7.6% at December 31, 2018) secured by the financial and operating assets of CAR and/or certain receivables and restricted cash with a combined aggregate carrying amount of $484.0 million as of March 31, 2019 ($468.8 million at December 31, 2018)
Revolving credit facility, not to exceed $40.0 million (expiring November 1, 2020) (1) (2)		31.2			30.0
Revolving credit facility, not to exceed $50.0 million (expiring October 30, 2019) (2) (3) (4)		49.6			49.9
Revolving credit facility, not to exceed $90.0 million (expiring February 8, 2022) (3) (4) (5) (6)		69.0			61.0
Revolving credit facility, not to exceed $100.0 million (expiring June 11, 2020) (3) (4) (5) (6)		80.5			80.5
Revolving credit facility, not to exceed $100.0 million (expiring November 16, 2020) (3) (4) (5) (6)		16.0			8.0
Revolving credit facility, not to exceed $167.3 million (expiring November 15, 2023) (3) (4) (5) (6)		167.3			167.3
Other facilities
Other secured debt (expiring September 8, 2023) that is secured by certain assets of the Company with an annual rate equal to 5.5%		1.2			1.2
Senior secured term loan to related parties (expiring November 21, 2019) that is secured by certain assets of the Company with an annual rate equal to 9.0% (4)		40.0			40.0
Total notes payable before unamortized debt issuance costs and discounts		454.8			437.9
Unamortized debt issuance costs and discounts		(6.6	)		(7.0	)
Total notes payable outstanding	$	448.2		$	430.9

(

)

Loan is subject to certain affirmative covenants, including a coverage ratio, a leverage ratio and a collateral performance test, the failure of which could result in required early repayment of all or a portion of the outstanding balance by our CAR Auto Finance operations.

(

)

These notes reflect modifications to either extend the maturity date, increase the loan amount or both, and are treated as accounting modifications.

(

)

Loans are subject to certain affirmative covenants tied to default rates and other performance metrics the failure of which could result in required early repayment of the remaining unamortized balances of the notes.

(

)

Loans are associated with variable interest entities.

( 5 )	See below for additional information.
( 6 )	Creditors do not have recourse against the general assets of the Company but only to the collateral within the VIEs.

Not

included in the table above are certain bank commitments to lend additional capital upon assignment of available collateral. The remaining terms on these agreements range from

months at interest rates based on LIBOR plus a spread of

4.5%

6.5%.

The total committed but undrawn capacity of these additional bank commitments as of

March 31, 2019

was

$97.0

million.

November 26, 2014,

we and certain of our subsidiaries entered into a Loan and Security Agreement with Dove Ventures, LLC, a Nevada limited liability company (“Dove”). The agreement provides for a senior secured term loan facility in an amount of up to

$40.0

million at any time outstanding. The Loan and Security Agreement was fully drawn with

$40.0

million outstanding as of

March 31, 2019.

November 2018,

the agreement was amended to extend the maturity date of the term loan to

November

21,

2019.

All other terms remain unchanged.

Our obligations under the agreement are guaranteed by certain subsidiary guarantors and secured by a pledge of certain assets of ours and the subsidiary guarantors. The loans bear interest at the rate of

9.0%

per annum, payable monthly in arrears. The principal amount of these loans is payable in a single installment on

November

21,

2019

(as amended). The agreement includes customary affirmative and negative covenants, as well as customary representations, warranties and events of default. Subject to certain conditions, we can prepay the principal amounts of these loans without premium or penalty.

Dove is a limited liability company owned by

three

trusts. David G. Hanna is the sole shareholder and the President of the corporation that serves as the sole trustee of

one

of the trusts, and David G. Hanna and members of his immediate family are the beneficiaries of this trust. Frank J. Hanna, III is the sole shareholder and the President of the corporation that serves as the sole trustee of the other

two

trusts, and Frank J. Hanna, III and members of his immediate family are the beneficiaries of these other

two

trusts.

October 2015,

we (through a wholly owned subsidiary) entered a revolving credit facility with a (as subsequently amended)

$50.0

million revolving borrowing limit that can be drawn to the extent of outstanding eligible principal receivables (of which

$49.6

million was drawn as of

March 31, 2019).

This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to LIBOR plus

5.0%.

The loan is subject to certain affirmative covenants, including a liquidity test and an eligibility test, the failure of which could result in required early repayment of all or a portion of the outstanding balance. The note is guaranteed by Atlanticus who is required to maintain certain minimum liquidity levels.

October 2016,

we (through a wholly owned subsidiary) entered a revolving credit facility with a

$40.0

million borrowing limit that can be drawn to the extent of outstanding eligible principal receivables of our CAR subsidiary (of which

$31.2

million was drawn as of

March 31, 2019).

This facility is secured by the financial and operating assets of CAR and accrues interest at an annual rate equal to LIBOR plus a range between

2.4%

and

3.0%

based on certain ratios. The loan is subject to certain affirmative covenants, including a coverage ratio, a leverage ratio and a collateral performance test, the failure of which could result in required early repayment of all or a portion of the outstanding balance. In

February 2019,

we extended the maturity date of this revolving credit facility to

November 1, 2020.

There were

other material changes to the existing terms or conditions and the new maturity date is reflected in the table above.

February 2017,

we (through a wholly owned subsidiary) established a program under which we sell certain receivables to a consolidated trust in exchange for notes issued by the trust. The notes are secured by the receivables and other assets of the trust. Simultaneously with the establishment of the program, the trust issued a series of variable funding notes and sold an aggregate amount of up to

$90.0

million (of which

$69.0

million was outstanding as of

March 31, 2019)

to an unaffiliated

third

party pursuant to a facility that can be drawn upon to the extent of outstanding eligible receivables. Interest rates on the notes are fixed and range from

12.0%

14.0%.

The facility matures on

February

2022

and is subject to certain affirmative covenants and collateral performance tests, the failure of which could result in required early repayment of all or a portion of the outstanding balance of notes. The facility also

may

be prepaid subject to payment of a prepayment or other fee.

2018,

we (through a wholly owned subsidiary) entered into

two

separate facilities associated with the above mentioned program to sell up to an aggregate

$200.0

million of notes which are secured by the receivables and other assets of the trust (of which

$96.5

million was outstanding as of

March 31, 2019)

to separate unaffiliated

third

parties pursuant to facilities that can be drawn upon to the extent of outstanding eligible receivables. Interest rates on the notes are based on commercial paper rates plus

4.25%

and LIBOR plus

4.5%,

respectively. The facilities mature on

June

11,

2020

and

November 16, 2020,

respectively, and are subject to certain affirmative covenants and collateral performance tests, the failure of which could result in required early repayment of all or a portion of the outstanding balance of notes. The facilities also

may

be prepaid subject to payment of a prepayment or other fee.

November 2018,

we sold

$167.3

million of asset backed securities (“ABS”) secured by certain retail point-of-sale receivables. A portion of the proceeds from the sale were used to pay-down our existing term and revolving facilities associated with our point-of-sale receivables, noted in the table above, and the remaining proceeds are available to fund the acquisition of future receivables. The terms of the ABS allow for a

two

-year revolving structure with a subsequent

-month amortization period. The weighted average interest rate on the securities is fixed at

5.76%.

We are in compliance with the covenants underlying our various notes payable.