9.	Notes Payable and Variable Interest Entities

The Company contributes certain receivables to VIEs. These entities are sometimes established to facilitate

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
	December 31, 2019			December 31, 2018
Unrestricted cash and cash equivalents	$	78.7		$	16.8
Restricted cash and cash equivalents	$	25.9		$	61.0
Loans, interest and fees receivable, at fair value	$	3.9		$	5.7
Loans, interest and fees receivable, gross	$	857.2		$	403.4
Allowances for uncollectible loans, interest and fees receivable	$	(168.8	)	$	(57.4	)
Deferred revenue	$	(40.7	)	$	(13.2	)
Total Assets held by VIEs	$	756.2		$	416.3
Notes Payable, at face value held by VIEs	$	701.1		$	366.7
Notes Payable, at fair value held by VIEs	$	3.9		$	5.7
Maximum exposure to loss due to involvement with VIEs	$	654.3		$	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

December 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

December 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

December 31, 2019

and

December 31, 2018

	Carrying Amounts at Fair Value as of
	December 31, 2019		December 31, 2018
Securitization facility (stated maturity of December 2021), outstanding face amount of $101.3 million as of December 31, 2019 ($101.3 million as of December 31, 2018) bearing interest at a weighted average 6.9% interest rate, based upon LIBOR, at December 31, 2019 (7.5% at December 31, 2018), which is secured by credit card receivables and restricted cash aggregating $3.9 million as of December 31, 2019 ($5.7 million as of December 31, 2018) in carrying amount	$	3.9	$	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

$3.9

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

$3.9

million, which means that we have

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

December 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

December 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
	December 31, 2019			December 31, 2018
Revolving credit facilities at a weighted average interest rate equal to 6.0% at December 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 $740.4 million as of December 31, 2019 ($468.8 million at December 31, 2018)
Revolving credit facility, not to exceed $55.0 million (expiring November 1, 2021) (1) (2) (3)	$	39.1		$	30.0
Revolving credit facility, not to exceed $50.0 million (expiring October 30, 2022) (2) (3) (4) (5)		40.5			49.9
Revolving credit facility, not to exceed $20.0 million (expiring March 31, 2020) (2) (4) (5)	19.4				—
Revolving credit facility, not to exceed $70.0 million (expiring February 8, 2022) (3) (4) (5) (6)		25.8			61.0
Revolving credit facility, not to exceed $100.0 million (expiring June 11, 2021) (3) (4) (5) (6)		—			80.5
Revolving credit facility, not to exceed $15.0 million (expiring July 15, 2021) (2) (4) (5)		14.6			—
Revolving credit facility, not to exceed $100.0 million (expiring November 16, 2020) (3) (4) (5) (6)		—			8.0
Revolving credit facility, not to exceed $167.3 million (expiring November 15, 2023) (3) (4) (5) (6)		167.3			167.3
Revolving credit facility, not to exceed $200.0 million (expiring December 15, 2022) (3) (4) (5) (6)		200.0			—
Revolving credit facility, not to exceed $200.0 million (expiring May 15, 2024) (3) (4) (5) (6)		200.0			—
Revolving credit facility, not to exceed $15.0 million (expiring December 21, 2020) (2) (3) (4) (5)		8.6			—
Revolving credit facility, not to exceed $50.0 million (expiring September 19, 2021) (2) (3) (4) (5)		15.0			—
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
Unsecured term debt (expiring August 26, 2024) with an annual rate equal to 8.0% (3)		17.4			—
Amortizing debt facility (expiring September 30, 2021) with an annual rate equal to 6.2% (2) (3) (4) (5)		10.0			—
Senior secured term loan to related parties (paid-off on December 27, 2019) that was secured by certain assets of the Company with an annual rate equal to 9.0% (3)		—			40.0
Total notes payable before unamortized debt issuance costs and discounts		758.9			437.9
Unamortized debt issuance costs and discounts		(9.7	)		(7.0	)
Total notes payable outstanding	$	749.2		$	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.

( 3 )	See below for additional information.
( 4 )	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.

( 6 )	Creditors do not have recourse against the general assets of the Company but only to the collateral within the VIEs.
*	As of December 31, 2019, the LIBOR rate was 1.75% and the prime rate was 4.75%.

November 26, 2014,

we and certain of our subsidiaries entered into a Loan and Security Agreement with Dove. The agreement provides for a senior secured term loan facility in an amount of up to

$40.0

million at any time outstanding. On

December 27, 2019,

the Company issued

400,000

shares (aggregate initial liquidation preference of

$40

million) of its Series A Preferred Stock in exchange for full satisfaction of the

$40.0

million that the Company owed Dove under the Loan and Security Agreement. See Note

"Shareholders' Equity and Preferred Stock" for additional information. 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

$40.5

million was drawn as of

December

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

3.0%.

The facility matures on

October 30, 2022

and 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 facility 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 an initial

$40.0

million borrowing limit available to the extent of outstanding eligible principal receivables of our CAR subsidiary (of which

$39.1

million was drawn as of

December 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 periods subsequent to

October 2016,

we amended the original agreement to either extend the maturity date and/or expand the capacity of this revolving credit facility. As of

December 31, 2019,

the borrowing limit was

$55.0

million and the maturity was

November 1, 2021

There were

other material changes to the existing terms or conditions as a result of these amendments and the new maturity date and borrowing limit are reflected in the table above.

December 2016,

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

$20.0

million revolving borrowing limit available to the extent of outstanding eligible principal receivables (of which

$19.4

million was drawn as of

December 31, 2019).

The facility matures on

March 31, 2020

and 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 note is guaranteed by Atlanticus.

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 (subsequently reduced to

$70.0

million) of such notes (of which

$25.8

million was outstanding as of

December 31, 2019)

to an unaffiliated

third

party pursuant to a facility that can be drawn upon to the extent of outstanding eligible receivables. The interest rate on the notes is fixed at

14.0%.

The facility matures on

February 8, 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.

December 2017,

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

$15.0

million revolving borrowing limit that is available to the extent of outstanding eligible principal receivables (of which

$8.6

million was drawn as of

December 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

3.5%.

The facility matures on

December 21, 2020

and is subject to certain affirmative covenants, including payment, delinquency and charge-off tests, 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.

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

$0.0

million was outstanding as of

December 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

3.75%

and LIBOR plus

4.875%,

respectively. The facilities mature on

June 11, 2021

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.

September 2018,

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

$50.0

million revolving borrowing limit that is available to the extent of outstanding eligible principal receivables (of which

$15.0

million was drawn as of

December 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

6.5%.

The loan is subject to certain affirmative covenants, including a charge-off and delinquency 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.

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%.

June 2019,

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

$15.0

million revolving borrowing limit that is available to the extent of outstanding eligible principal receivables (of which

$14.6

million was drawn as of

December 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 the prime rate. The note is guaranteed by Atlanticus.

June 2019,

we sold

$200.0

million of ABS secured by certain credit card receivables. A portion of the proceeds from the sale was used to pay-down our existing facilities associated with our credit card receivables. The terms of the ABS allow for a

two

-year revolving structure with a subsequent

-month to

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

5.37%.

August 2019,

we repurchased

$54.4

million in face amount of our outstanding convertible senior notes for

$16.3

million in cash (including accrued interest) and the issuance of a

$17.4

million term note, which bears interest at a fixed rate of

8.0%

and is due in

August 2024.

See Note

"Convertible Senior Notes" for additional information.

September 2019,

we (through a wholly owned subsidiary) entered a term facility with a

$30.0

million revolving borrowing limit (of which

$10.0

was drawn as of

December 31, 2019)

that is available to the extent of outstanding eligible principal receivables. 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

4.5%.

The facility matures on

September 30, 2021

and 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, which is required to maintain certain minimum liquidity levels.

November 2019,

we sold

$200.0

three

-year revolving structure with a subsequent

-month to

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

4.91%.

As of

December 31, 2019,

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