Organization and Operations of the Company

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Organization and Operations of the Company

Note 1. Organization and Operations of the Company

TriLinc Global Impact Fund, LLC (the “Company”) was organized as a Delaware limited liability company on April 30, 2012 and formally commenced operations on June 11, 2013. The Company makes impact investments in Small and Medium Enterprises, known as SMEs, which the Company defines as those businesses having less than 500 employees, primarily in developing economies that provide the opportunity to achieve both competitive financial returns and positive measurable impact. The Company uses the proceeds raised from the issuance of units to invest in SMEs through local market sub-advisors in a diversified portfolio of financial assets, including direct loans, convertible debt instruments, trade finance, structured credit and preferred and common equity investments. To a lesser extent, the Company may also make impact investments in companies that may not meet our technical definition of SMEs due to a larger number of employees but that also provide the opportunity to achieve both competitive financial returns and positive measurable impact. In addition, the Company may also make investments in developed economies, including the United States. The Company generally expects that such investments will have similar investment characteristics as SMEs as defined by the Company. The Company’s investment objectives are to generate current income, capital preservation and modest capital appreciation primarily through investments in SMEs. The Company is externally managed by TriLinc Advisors, LLC (the “Advisor”). The Advisor is an investment advisor registered with the Securities and Exchange Commission (“SEC”).

TriLinc Global, LLC (the “Sponsor”) is the sponsor of the Company and employs staff who operate both the Advisor and the Company.  The Sponsor owns 100% of the Advisor.

In May 2012, the Advisor purchased 22,161 Class A units for aggregate gross proceeds of $200,000. The Company commenced its initial public offering of up to $1,500,000,000 in units of limited liability company interest (the “Offering”) on February 25, 2013. On June 11, 2013, the Company satisfied its minimum offering requirement of $2,000,000 when the Sponsor purchased 321,330 Class A units for aggregate gross proceeds of $2,900,000 and the Company commenced operations. The primary public offering terminated on March 31, 2017. The Company continues to offer and sell units pursuant to its Distribution Reinvestment Plan (“DRP”). Through the termination of the primary offering, the Company raised approximately $361,776,000 in gross proceeds, including approximately $13,338,000 raised through the DRP. For the period from April 1, 2017 to June 30, 2022, the Company raised an additional $100,031,000 pursuant to a private placement and $49,086,000 pursuant to the DRP, for total gross proceeds of approximately $510,893,000 as of June 30, 2022.

Although the Company was organized and intends to conduct its business in a manner so that it is not required to register as an investment company under the Investment Company Act of 1940, as amended, the consolidated financial statements are prepared using the specialized accounting principles of the Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 946, Financial Services — Investment Companies. Overall, the Company’s management believes the use of investment company accounting makes the Company’s financial statements more useful to investors and other financial statement users since it allows a more appropriate basis of comparison to other entities with similar objectives.

To assist the Company in achieving its investment objective, the Company makes investments via wholly owned subsidiaries (each a “Subsidiary” and collectively, the “Subsidiaries”), all of which are Cayman Islands exempted companies.  The Subsidiaries own all of the Company’s investments. As of June 30, 2022, the Company’s subsidiaries are as follows:

• TriLinc Global Impact Fund – Asia, Ltd.

• TriLinc Global Impact Fund – Latin America, Ltd.

• TriLinc Global Impact Fund – Trade Finance, Ltd.

• TriLinc Global Impact Fund – African Trade Finance, Ltd.

• TriLinc Global Impact Fund – Africa, Ltd.

• TriLinc Global Impact Fund – Latin America II, Ltd.

• TriLinc Global Impact Fund – African Trade Finance II, Ltd.

• TriLinc Global Impact Fund – Latin America III, Ltd.

• TriLinc Global Impact Fund – Asia II, Ltd.

• TriLinc Global Impact Fund – Asia III, Ltd.

• TriLinc Global Impact Fund – Asia IV, Ltd.

• TriLinc Global Impact Fund – African Trade Finance III, Ltd.

• TriLinc Global Impact Fund – Europe, Ltd.

• TriLinc Global Impact Fund – North America, Ltd.

• TriLinc Global Impact Fund – Africa Latin America, Ltd.

• TriLinc Global Impact Fund – Cayman, Ltd.

Through June 30, 2022, the Company has made, through its Subsidiaries, loans in a number of countries located in South America, Asia, Africa, North America, and Europe.

COVID-19

The ongoing COVID-19 pandemic (more commonly referred to as the Coronavirus), including the emergence of the BA.5 variant and other variants, continues to adversely impact many industries and businesses directly or indirectly. Adverse impacts include disrupted global travel and supply chains, which adversely impact global commercial activity. Many businesses across the globe have seen a downturn in production and productivity due to the suspension of business and temporary closure of offices and factories that was prevalent during most of 2020 and continued into the second quarter of 2022 in certain areas. Although the economic recovery has been significantly affected by supply chain disruptions and higher input costs, which have been exacerbated by the conflict between Russia and Ukraine. These issues have more acutely affected developing economies. The Company believes that some of the regions in which it invests are poised to achieve economic normalization once the supply chain disruptions and input cost increases dissipate. However, the Company believes certain regions, industries and borrowers may experience further material economic distress due to the compound impact of more than two years of economic hardship and some borrowers may find it difficult or impossible to recover. Any of these adverse developments could have a material adverse effect on our business, financial condition and results of operations. However, if COVID-19 cases began to spike again globally, as we saw with recent variants, it could further adversely impact the Company’s borrowers’ businesses, financial condition and results of operations, which could result in their inability to make required payments in the near term and impact the fair value of the Company’s investments. During the six months ended June 30, 2022 and the year ended December 31, 2021, the Company made material adjustments to the fair value of certain of its investments, in part due to the impact of COVID-19. These adjustments, which amounted to approximately $231,000 and $6,368,000, respectively, in the aggregate during the six months ended June 30, 2022 and the year ended December 31, 2021, were made with respect to 18.7% and 18.5%, respectively, of the Company’s investments (calculated based on the aggregate fair value of the Company’s total investments).

Although the Coronavirus has created material uncertainty and economic disruption, due to the rapidly evolving nature of the situation, the Company cannot predict the ultimate impact it will have on us. The Company is managing the situation through active engagement with its borrowers and is analyzing the potential effects COVID-19 may have on the portfolio or any potential capital deployments. Additionally, our Advisor has implemented its business continuity plan and additional procedures designed to protect against the introduction of the Coronavirus to the workforce, including permitting employees to work remotely and significantly enhanced office sterilization procedures to minimize the probability of contagion.

While many of the Company’s borrowers' businesses have experienced some disruption related to COVID-19, degrees of effect have varied.  For example, as indicated under "Watch List Investments" below, the borrowers with respect to the investment added to the Watch List for the six months ended June 30, 2022 and for the year ended December 31, 2021 have not made required payments in part due to adverse impacts they have experienced related to the COVID-19 pandemic, as well as due to the adverse impacts of supply chain disruptions and higher input costs associated with shortages of goods and labor. Where appropriate, the Company and/or the Company’s sub-advisors are working with borrowers to restructure facilities and may restructure additional facilities to provide relief needed by certain borrowers, without necessarily providing concessions that are out of market. Due in part to the disruptions associated with COVID-19 as well as due to the supply chain disruptions and increased input costs, the Company can provide no assurances that it will be able to continue to collect interest and principal payments at levels comparable to those prior to the pandemic. Further, the Company can provide no assurances that it will be able to recover all past due amounts from delinquent borrowers. The economic uncertainty and disruption described above is expected to continue and the Company may see further defaults and additional investments may be added to the Watch List in subsequent quarters. The adverse impact of COVID-19 was one of the material contributors to the approximate $0.22 decline in the Company's NAV per unit as of June 30, 2022, as compared to the Company’s NAV per unit as of December 31, 2021. The Company's NAV is a reflection of the cumulative effect of 10 consecutive quarters of the adverse economic impact of COVID-19, compounded by the rising input costs caused, in part, by the conflict between Russia and Ukraine.

In addition, the Company saw a slowdown in transaction volume due to the impact of the pandemic in the first and second quarters of 2022 and through most of 2021, as smaller SMEs and those in industries most affected by COVID-19 (travel and hospitality, retail sales, etc.) were no longer in a position to appropriately add debt capital. While transaction volume has increased in recent months, it has not yet recovered to pre-pandemic levels and may continue to be affected by restrictions on travel and other shelter in place orders, making it more difficult to conduct in-person visits with potential borrowers. Additionally, in future periods the Company may hold higher levels of cash than before the pandemic to ensure it has sufficient cash available to meet its cash obligations. Uncertain or inconsistent deployment of capital or higher cash balances each have the potential to further reduce cash flow generated to cover the Company’s distributions to its unitholders and/or cause the Company to further reduce its NAV in future periods.

Inflation and Conflict in Ukraine

Input costs remain high and the conflict between Russia and Ukraine has increased the disruption, instability and volatility in global markets and industries. The Company does not have any investments in, and none of its borrowers receive supplies directly from,

Russia, Belarus or Ukraine. Therefore, to date, the Company has not been materially impacted by the actions of the Russian government. Market disruptions in a single country could cause a worsening of conditions on a regional and even global level, as economic problems in a single country can significantly impact other markets and economies. While the direct impact on the Company of Russia's invasion of Ukraine is limited, the Company is being affected by increases in the price of oil as a result of sanctions on Russia, which contributes to overall inflation and increased costs. The ongoing conflict could cause increased volatility in the economies and financial markets of countries throughout the region, or even globally. The Company continues to monitor the uncertainty surrounding the extent and duration of this ongoing conflict and the impact that it may have on the global economy and on the Company's business.