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Notes Receivable, net
 12 Months Ended
Dec. 31, 2023
Receivables [Abstract]  
Notes Receivable, net

Note 3 – Notes Receivable, net

The Company’s notes receivable balance consists of loans to buyers of charged-off and nonperforming receivable portfolios, which resulted in a total balance of approximately $17.5 million, net of unamortized deferred fees and costs on originated loans and the allowance for credit losses as of December 31, 2023. The activity during 2023 includes the additional investment in notes receivable net of transfers to partners of approximately $21.0 million, principal payments made by borrowers of approximately $11.9 million, adjustments to the deferred fees and costs balance of approximately $0.1 million, and the allowance for credit losses totaling approximately $0.7 million.

The table below shows the Company’s lending activity:

 

 

 

2023

 

 

2022

 

Notes receivable, beginning of year

 

$

9,161

 

 

$

4,172

 

Investment in notes receivable

 

 

29,826

 

 

 

8,435

 

Transfer of notes

 

 

(8,851

)

 

 

—

 

Principal repayments

 

 

(11,876

)

 

 

(3,446

)

Notes receivable, end of year

 

 

18,260

 

 

 

9,161

 

Deferred financing fees and costs, net

 

 

(139

)

 

 

(411

)

Allowance for credit loss

 

 

(650

)

 

 

—

 

Notes receivable, net, end of year

 

$

17,471

 

 

$

8,750

 

In accordance with ASC 326, the Company performs a review of notes receivable on a quarterly basis. During 2023, the Company recorded a provision for credit losses in selling, general and administrative expense on the consolidated statement of income of approximately $0.5 million. As of December 31, 2023, the allowance for credit losses was approximately $0.7 million. An allowance for credit losses was not recorded as of December 31, 2022. The allowance for credit losses in 2023 was primarily driven by weakening economic conditions for the underlying charged-off and nonperforming portfolio collections and increases in loan balances. The Company's credit loss reserve rate specific to its notes receivable balance as of December 31, 2023 was 3.6%. As of December 31, 2023, the Company has recorded no actual credit losses on notes receivable.