Related Party Transactions

We lease office space from a related party under common management control for which rent expenses are recognized within related party expenses in the Unaudited Consolidated Statements of Operations. Total rent expenses related to this office space were $441 and $372 for the three months ended June 30, 2018 and 2017, respectively. Total rent expenses related to this office space were $813 and $745 for the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018, a $300 tenant allowance associated with this lease was outstanding, which is presented within related party receivables in the Unaudited Consolidated Balance Sheets.

We entered into loan agreements, most of which are non-interest bearing, with certain non-executive employees for which the remaining outstanding balances will be forgiven ratably over designated periods based on continual employment with the Company. As of June 30, 2018 and December 31, 2017, the remaining outstanding balances on these loan agreements were $35 and $210, respectively, which are presented within related party receivables in the Unaudited Consolidated Balance Sheets.

Equity-based payments to non-employees resulted in related party expenses for the three months ended June 30, 2018 and 2017, of $0 and $95, respectively. Equity-based payments to non-employees resulted in related party expenses for the six months ended June 30, 2018 and 2017, of $0 and $190, respectively.

In May 2018, we declared a special operating distribution of $26.2 million. As of June 30, 2018, $25.1 million of the declared distribution was paid in cash, including $1.0 million to an affiliate of a related party. The remaining portion of the declared distribution will be paid in stages upon vesting events, and is recorded within related party liabilities ($0.2 million) and other liabilities ($0.9 million) in the Unaudited Consolidated Balance Sheets as of June 30, 2018.

In August 2017, we incurred fees of $2.6 million due to an affiliate of one of the members of the board of managers in connection with finalizing our August 2017 term loan transaction. These costs were not directly attributable to the original term loan and were, therefore, expensed as incurred, rather than deferred against the term loan balance. The unpaid portion of these fees of $0.5 million is recorded within related party liabilities in the Unaudited Consolidated Balance Sheets as of June 30, 2018.

In November 2016, we executed a $20.0 million Bank Partner agreement (“2016 Agreement”) with affiliates of two members of our Board of Directors. The agreement was structured similarly to the origination and servicing arrangements with the other Bank Partners, wherein the Company is required to hold restricted cash based on monthly originations and the month-end outstanding portfolio balance. In June 2018, the outstanding loans owned by this related party were sold to another Bank Partner, which is not a related party, and continue to be serviced by us. In connection with that loan sale, the related party financing partner ended its servicing agreement with us, and as such, as of June 30, 2018, we no longer have any related party financing partner agreements.

We are entitled to collect fixed servicing fees in conjunction with the 2016 Agreement. As of June 30, 2018, and December 31, 2017, our related party financing partners had committed balances in the aggregate of $0.0 million and $11.7 million, respectively.

Unaudited Consolidated Balance Sheets effects associated with our related party financing partners were as follows at the dates indicated:



	June 30, 2018		December 31, 2017
Related party receivables⁽¹⁾	$	—	$	8
Related party liabilities⁽²⁾	—		445
Restricted cash	—		437


⁽¹⁾	Receivables related to servicing and other.


⁽²⁾	Related party liabilities primarily consisted of related party servicing payables.

Unaudited Consolidated Statements of Operations effects associated with our related party financing partners were as follows during the periods indicated, and includes the income related impact of our two previous related party financing arrangements that were terminated in June 2018 and June 2017, respectively.



	Three Months Ended June 30,					Six Months Ended June 30,
	2018			2017		2018		2017

Servicing and other	$	26		$	137	$	54	$	216
Related party expenses⁽¹⁾	(211		)	26		—		69


⁽¹⁾	Expenses incurred related to related party financing partner credit losses.