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Borrowings | 9 Months Ended
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Sep. 30, 2021
Debt Disclosure [Abstract] |
Borrowings | Borrowings The following is a summary of the Company’s borrowings (in thousands):
Purpose |  | Borrower |  | Borrowing Capacity |  | September 30, 2021 |  | December 31, 2020 |  | Interest Rate as of September 30, 2021, Except as Noted |  | Maturity Date
Secured borrowing payable |  | Opportunity Funding SPE II, LLC |  | $ | 38,036 |  |  | $ | 19,791 |  |  | $ | 16,025 |  |  | 15.00% |  | December 2021
Senior debt |  |  |  |  |  |  |  |  |  |  |  |
Revolving line of credit |  | OppFi-LLC |  | $ | — |  |  | $ | — |  |  | $ | 5,000 |  |  | LIBOR plus 2.50% |  | February 2022
Revolving line of credit |  | Opportunity Funding SPE III, LLC |  | 175,000 |  |  | 87,500 |  |  | 59,200 |  |  | LIBOR plus 6.00% |  | January 2024
Revolving line of credit |  | Opportunity Funding SPE V, LLC |  | 75,000 |  |  | 37,500 |  |  | 24,222 |  |  | LIBOR plus 7.25% |  | April 2023
Revolving line of credit |  | Opportunity Funding SPE VI, LLC |  | 50,000 |  |  | 25,000 |  |  | 16,148 |  |  | LIBOR plus 7.25% |  | April 2023
Revolving line of credit |  | Opportunity Funding SPE IV, LLC; SalaryTap Funding SPE, LLC |  | 45,000 |  |  | 7,500 |  |  | 12,506 |  |  | LIBOR plus 3.85% |  | February 2024
Total revolving lines of credit |  |  |  | 345,000 |  |  | 157,500 |  |  | 117,076 |  |  |  |  |
Term loan, net |  | OppFi-LLC |  | 50,000 |  |  | 48,468 |  |  | 14,650 |  |  | LIBOR plus 10.00% |  | March 2025
Total senior debt |  |  |  | $ | 395,000 |  |  | $ | 205,968 |  |  | $ | 131,726 |  |  |  |  |
Subordinated debt - related party |  | OppFi-LLC |  | $ | — |  |  | $ | — |  |  | $ | 4,000 |  |  | 14.00% | (1) | December 2023
Other debt |  | OppFi-LLC |  | $ | — |  |  | $ | — |  |  | $ | 6,354 |  |  | 1.00% | (2) | April 2022
(1) |  | Interest rate as of 12/31/2020 and for the subsequent period thru and until loan was repaid |  |
(2) |  | Interest rate as of 12/31/2020 and for the subsequent period thru and until loan was forgiven |  |
Secured borrowing payable: During 2017, Opportunity Funding SPE II, LLC entered into a preferred return agreement with Midtown Madison Management LLC. Per the terms of the agreement, the finance receivables are grouped into quarterly pools. Collections are distributed on a pro rata basis after the payout of expenses to back-up servicer, servicer and other relevant parties. This agreement is secured by the assets of Opportunity Funding SPE II, LLC. The receivables are transferred to Opportunity Funding SPE II, LLC and OppWin LLC by OppFi-LLC, which has provided representations and warranties in connection with such sale. The agreement is subject to various financial covenants. During 2018, the SPE II, LLC preferred return agreement was amended. Opportunity Funding SPE II, LLC sells a 97.5 percent interest of certain unsecured finance receivables to the unrelated third party. Per the revised agreement, the unrelated third party earns a preferred return of 15.0 percent and a performance fee after the preferred return has been satisfied. The initial agreement expired August 1, 2018 and was then extended for one year. The agreement provides for two consecutive options to renew the purchase period for eighteen months. The unrelated third party exercised the first option, which provides a $65,000 thousand purchase commitment by the unrelated third party. After satisfaction of the purchase commitment, the agreement provides for a third option for an additional $100,000 thousand purchase commitment. In May 2020, the SPE II, LLC preferred return agreement was amended. Midtown Madison Management LLC exercised the option, which provides an additional $100,000 thousand purchase commitment, resulting in a total $165,000 thousand purchase commitment by the unrelated third party, of which $126,964 thousand and $79,816 thousand of finance receivables have been purchased with an active secured borrowing balance of $19,791 thousand and $16,025 thousand as of September 30, 2021 and December 31, 2020, respectively. Interest expense related to secured borrowings was $655 thousand and $475 thousand for the three months ended September 30, 2021 and 2020, respectively, and $2,027 thousand and $1,585 thousand for the nine months ended September 30, 2021 and 2020, respectively. Additionally, the Company has capitalized $168 thousand in debt issuance costs related to secured borrowings. Amortized debt issuance costs related to secured borrowings were $4 thousand and $13 thousand for the three months ended September 30, 2021 and 2020, respectively, and $29 thousand and $38 thousand for the nine months ended September 30, 2021 and 2020, respectively. As of September 30, 2021, there were no unamortized debt issuance costs related to secured borrowings. As of December 31, 2020, the remaining balance of unamortized debt issuance costs related to secured borrowings was $30 thousand.. Senior debt: On August 13, 2018, OppFi-LLC entered into a corporate credit agreement with TCS Global Holdings, L.P., which provided a maximum available amount of $10,000 thousand. Interest was payable monthly. The facility was secured by OppFi-LLC’s assets and certain brokerage assets made available by the Schwartz Capital Group (SCG), a related party. The agreement was subject to various financial covenants. On August 6, 2020, the corporate credit agreement was amended, and the maturity date was extended to February 2022. On March 23, 2021, the borrowings under this revolving credit agreement were paid in full. Subsequent to repayment, OppFi-LLC terminated the revolving credit agreement. Interest expense paid related to the revolving credit agreement totaled $39 thousand for the three months ended September 30, 2020. Interest expense paid related to the revolving credit agreement totaled $35 thousand and $123 thousand for the nine months ended September 30, 2021 and 2020, respectively. Additionally, the Company has capitalized $294 thousand in debt issuance costs in connection with this transaction. For the three months ended September 30, 2021, there were no amortized debt issuance costs. Amortized debt issuance costs were $3 thousand for the three months ended September 30, 2020. For the nine months ended September 30, 2021 and 2020, amortized debt issuance costs were $21 thousand and $19 thousand, respectively. As of December 31, 2020, the remaining balance of unamortized debt issuance costs associated with the facility was $21 thousand. On January 23, 2018, Opportunity Funding SPE III, LLC entered into a revolving line of credit agreement with Ares Agent Services, L.P. that provides maximum borrowings of $75,000 thousand. Interest is payable monthly. Borrowings are secured by the assets of Opportunity Funding SPE III, LLC. OppFi-LLC provides certain representations and warranties. The line of credit agreement is subject to a borrowing base threshold and various financial covenants, including maintaining a minimum tangible net worth and maximum senior debt to equity. On January 31, 2020, the revolving line of credit agreement was amended to increase the aggregate commitment to $175,000 thousand. The amendment also changed the interest rate to one-month LIBOR plus 6 percent with a 2 percent LIBOR floor. The agreement matures in January 2024. Interest expense related to this facility was $1,908 thousand and $1,514 thousand for the three months ended September 30, 2021 and 2020, respectively, and $5,094 thousand and $6,051 thousand for the nine months ended September 30, 2021 and 2020, respectively. Additionally, the Company has capitalized $2,100 thousand in debt issuance costs in connection with this transaction. Amortized debt issuance costs were $177 thousand and $171 thousand for the three months ended September 30, 2021 and 2020, respectively, and $530 thousand and $565 thousand for the nine months ended September 30, 2021 and 2020, respectively. As of September 30, 2021 and December 31, 2020, the remaining balance of unamortized debt issuance costs associated with the facility was $942 thousand and $1,453 thousand, respectively. In April 2019, Opportunity Funding SPE V, LLC entered into a revolving line of credit agreement with Midtown Madison Management LLC (the “OppFi-LLC Midtown Credit Agreement”) that provides maximum borrowings of $75,000 thousand. Interest is payable monthly. Borrowings are secured by the assets of Opportunity Funding SPE V, LLC. OppFi-LLC provides certain representations and warranties related to the debt. The line of credit agreement is subject to a borrowing base and various financial covenants, including maintaining a minimum tangible net worth and restrictions related to dividend payments. Interest expense related to this facility was $966 thousand and $742 thousand for the three months ended September 30, 2021 and 2020, respectively, and $2,531 thousand and $2,742 thousand for the nine months ended September 30, 2021 and 2020, respectively. Additionally, the Company has capitalized $1,158 thousand in debt issuance costs in connection with this transaction. Amortized debt issuance costs were $106 thousand and $100 thousand for the three months ended September 30, 2021 and 2020, respectively, and $318 thousand and $283 thousand for the nine months ended September 30, 2021 and 2020, respectively. As of September 30, 2021 and December 31, 2020, the remaining balance of unamortized debt issuance costs associated with this facility was $230 thousand and $538 thousand, respectively. In April 2019, Opportunity Funding SPE VI, LLC entered into a revolving line of credit agreement with Ares Agent Services, L.P. that provides maximum borrowings of $50,000 thousand. Interest is payable monthly. Borrowings are secured by the assets of Opportunity Funding SPE VI, LLC. OppFi-LLC provides certain representations and warranties related to the debt. The line of credit agreement is subject to a borrowing base and various financial covenants, including maintaining a minimum tangible net worth and restrictions related to dividend payments. Interest expense related to this facility was $644 thousand and $494 thousand for the three months ended September 30, 2021 and 2020, respectively, and $1,688 thousand and $1,843 thousand for the nine months ended September 30, 2021 and 2020, respectively. Additionally, the Company has capitalized $918 thousand in debt issuance costs in connection with this transaction. Amortized debt issuance costs were $83 thousand and $76 thousand for the three months ended September 30, 2021 and 2020, respectively, and $247 thousand and $227 thousand for the nine months ended September 30, 2021 and 2020, respectively. As of September 30, 2021 and December 31, 2020, the remaining balance of unamortized debt issuance costs associated with this facility were $178 thousand and $425 thousand, respectively. In August 2019, Opportunity Funding SPE IV, LLC entered into a revolving line of credit agreement with BMO Harris Bank N.A. that provides maximum borrowings of $25,000 thousand. Interest is payable monthly. Borrowings are secured by the assets of Opportunity Funding SPE IV, LLC. OppFi-LLC provides certain representations and warranties related to the debt, as well as an unsecured guaranty. The line of credit agreement is subject to a borrowing base and various financial covenants, including maintaining a minimum tangible net worth and restrictions related to dividend payments. On September 30, 2021, the revolving line of credit agreement was amended to increase the aggregate commitment to $45,000 thousand. The amended agreement added SalaryTap Funding SPE, LLC as an additional borrower to the facility. SalaryTap Funding SPE, LLC will pledge SalaryTap receivables as eligible collateral. The amendment also changed the interest rate from LIBOR plus 4.25% to LIBOR plus 3.85% with a 0.4% LIBOR floor, and the amended agreement matures in February 2024. For SalaryTap Funding SPE, LLC, the Company capitalized $250 thousand in debt issuance costs in connection with the September 30, 2021 amendment. As of September 30, 2021, the remaining balance of unamortized debt issuance costs associated with this facility was $250 thousand Interest expense related to this facility was $110 thousand and $104 thousand for the three months ended September 30, 2021 and 2020, respectively, and $332 thousand and $401 thousand for the nine months ended September 30, 2021 and 2020, respectively. Additionally, the Company has capitalized $626 thousand in debt issuance costs in connection with this transaction. Amortized debt issuance costs were $93 thousand and $52 thousand for the three months ended September 30, 2021 and 2020, respectively, and $308 thousand and $148 thousand for the nine months ended September 30, 2021 and 2020, respectively. As of September 30, 2021 and December 31, 2020, the remaining balance of unamortized debt issuance costs associated with this facility was $50 thousand and $131 thousand, respectively. In November 2018, OppFi-LLC entered into a $25,000 thousand senior secured multi-draw term loan agreement with Midtown Madison Management LLC (the “OppFi-LLC Midtown Term Loan Agreement”), which is secured by a senior secured claim on OppFi-LLC’s assets and a second lien interest in the receivables owned by Opportunity Funding SPE III, LLC, Opportunity Funding SPE V, LLC, and Opportunity Funding SPE VI, LLC. Interest is payable monthly. The loan agreement is subject to various financial covenants. Per the terms of the loan agreement, OppFi-LLC had issued warrants to the lender. In April 2020, OppFi-LLC exercised an option to increase the facility commitment amount to $50,000 thousand. On March 23, 2021, the senior secured multi-draw term loan agreement was amended to decrease the interest rate from LIBOR plus 14% to LIBOR plus 10% and extend the maturity date to March 23, 2025. On March 30, 2021, OppFi-LLC drew the remaining $35,000 thousand available commitment. As of September 30, 2021, the outstanding balance of $50,000 thousand was net of unamortized debt issuance costs of $1,532 thousand. There was no unamortized discount as of September 30, 2021. As of December 31, 2020, the outstanding balance of $15,000 thousand was net of unamortized discount of $19 thousand and unamortized debt issuance costs of $331 thousand. Interest expense related to this facility was $1,546 thousand and $670 thousand for the three months ended September 30, 2021 and 2020, respectively, and $3,738 thousand and $1,965 thousand for the nine months ended September 30, 2021 and 2020, respectively. Additionally, the Company has capitalized $2,295 thousand in debt issuance costs in connection with this transaction. Amortized debt issuance costs were $109 thousand and $59 thousand for the three months ended September 30, 2021 and 2020, respectively, and $282 thousand and $171 thousand for the nine months ended September 30, 2021 and 2020, respectively. Subordinated debt - related party: OppFi-LLC previously had an unsecured line of credit agreement with SCG, a related party, with a maximum available amount of $4,000 thousand. Interest due on this facility is paid quarterly, and the outstanding balance is due at maturity. Subordinated debt is subject to the same debt covenants as senior debt facilities. On March 30, 2021, the borrowings under this unsecured line of credit agreement were paid in full. Interest expense related to this related party transaction was $141 thousand for the three months ended September 30, 2020. Interest expense was $137 thousand and $420 thousand for the nine months ended September 30, 2021 and 2020, respectively. Other debt: On April 13, 2020, OppFi-LLC obtained an unsecured loan in the amount of $6,354 thousand from BMO Harris Bank N.A. in connection with the U.S. Small Business Administration’s (“SBA”) Paycheck Protection Program (the “PPP Loan”). Pursuant to the Paycheck Protection Program, all or a portion of the PPP Loan was forgivable if OppFi used the proceeds of the PPP Loan for its payroll costs and other expenses in accordance with the requirements of the Paycheck Protection Program. OppFi-LLC used the proceeds of the PPP Loan for payroll costs and other covered expenses. On November 14, 2020, OppFi-LLC submitted the forgiveness application to the SBA. On September 13, 2021, the Company was notified that the SBA had forgiven repayment of the entire PPP Loan, which consisted of $6,354 thousand in principal and $90 thousand of accrued interest. The Company recorded the entire amount of the forgiven principal and accrued interest as other income in its statement of operations during the quarter ended September 30, 2021. As of September 30, 2021, there was no outstanding balance for the PPP Loan. Interest accrued and expensed related to this unsecured loan through the date of forgiveness was $13 thousand for the three months ended September 30, 2021 and $90 thousand for the nine months ended September 30, 2021. The SBA reserves the right to audit any PPP Loan, for eligibility and other criteria, regardless of size. These audits may occur after forgiveness has been granted. In accordance with the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), all borrowers are required to maintain their PPP loan documentation for six years after the PPP Loan was forgiven and to provide that documentation to the SBA upon request. As of September 30, 2021, required payments for all borrowings, excluding secured borrowing and revolving lines of credit, for each of the next five years are as follows (in thousands):
Year |  | Amount
Remainder of 2021 |  | $ | — |
2022 |  | — |
2023 |  | — |
2024 |  | — |
2025 |  | 50,000 |
Total |  | $ | 50,000 |

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (h) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (g) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1E -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (i) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 + Details
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