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Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2025
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

 

The accompanying financial statements have been prepared under the accrual basis and are in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) in compliance with the Accounting Standards Codification (“ASC”) of the Financial Accounting Standards Board (“FASB”).

 
Principles of Consolidation

Principles of Consolidation

 

The consolidated financial statements include the accounts of Manhattan Bridge Capital, Inc. and its wholly-owned subsidiary, MBC Funding II. All significant intercompany balances and transactions have been eliminated in consolidation.

 
Use of Estimates

Use of Estimates

 

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Management will base the use of estimates on (a) a preset number of assumptions that consider past experience, (b) future projections, and (c) general financial market conditions. Actual amounts could differ from those estimates.

 
Concentrations of Credit Risk

Concentrations of Credit Risk

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and short-term commercial loans.

 

The Company maintains its cash with major financial institutions. Accounts at the financial institutions are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per depositor.

 

Credit risks associated with short-term commercial loans the Company makes to real estate investors and related interest and other fees receivable are described in Note 4.

 

 
Allowance for Credit Losses

Allowance for Credit Losses

 

The Company complies with Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses (ASC Topic 326).” The CECL methodology utilizes a lifetime “expected credit loss” methodology for the recognition of credit losses for loans and other receivables at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses.

 

The Company estimates its CECL reserve primarily using the Weighted Average Remaining Maturity (“WARM”) method, which has been identified as an acceptable loss-rate method for estimating CECL reserves in the FASB Staff Q&A ASC Topic 326, No.1. The WARM method requires reference to historic loss data taking into consideration expected economic conditions over the relevant timeframe. The Company applies the WARM method for the majority of its loan portfolio, which loans share similar risk characteristics.

 

Application of the WARM method to estimate a CECL reserve requires judgment, including (i) the appropriate historical loan loss reference data, (ii) the expected timing and amount of future loan fundings and repayments, and (iii) the current credit quality of the Company’s loan portfolio and expectations of performance and market conditions over the relevant time period. To estimate the historic loan losses relevant to the Company’s portfolio, the Company reviews its historical loan performance, which includes zero realized principal losses since the inception of the Company’s business. In addition, the Company reviews each loan on a quarterly basis and evaluates the borrower’s ability to pay the monthly interest, the borrower’s likelihood of executing the original exit strategy, as well as the loan-to-value ratio. Based on these analyses, as of December 31, 2025 and 2024, no allowance for credit losses is required. Failure to properly measure an allowance for credit losses could result in the overstatement of earnings and the carrying value of the loans receivable. Actual losses, if any, could differ significantly from estimated amounts.

 
Income Taxes

Income Taxes

 

The Company follows ASC Sub-Topic 740-10, “Accounting for Uncertainty in Income Taxes”, which prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. As of December 31, 2025 and 2024, the Company has no material uncertain tax positions to be accounted for in the consolidated financial statements. The Company recognizes interest and penalties related to uncertain tax positions, if any, as part of income tax expense.

 

The Company is organized and conducts its operations to qualify as a real estate investment trust (“REIT”) for federal income tax purposes. The Company elected to be taxed as a REIT commencing with its taxable year ended December 31, 2014. A REIT calculates taxable income similar to other domestic corporations, with the major difference being a REIT is entitled to a deduction for dividends paid. A REIT is generally required to distribute each year at least 90% of its REIT taxable income. If it chooses to retain the remaining 10% of taxable income, it may do so, but it will be subject to a corporate income tax on such income. The Company may be subject to federal excise tax and minimum state taxes.

 

 
Revenue Recognition

Revenue Recognition

 

Interest income from commercial loans is recognized, as earned, over the loan period.

 

Origination fee revenue on commercial loans is amortized over the term of the respective note.

 
Deferred Financing Costs

Deferred Financing Costs

 

Deferred financing costs related to the Company’s former 6% senior secured notes (the “Notes”) were presented as a direct reduction of the related debt liability in accordance with ASU 2015-03 (ASC Sub-Topic 835-30) and were amortized over the term of the Notes. The remaining unamortized balance of costs was fully recognized upon redemption of the Notes in December 2025.

 

Deferred financing costs related to the Company’s credit facilities, including (i) the Amended and Restated Credit and Security Agreement, as amended (the “Amended and Restated Credit Agreement”) with Webster Bank, N.A. (as successor to Webster Business Credit Corporation) (“Webster”), Flushing Bank (“Flushing”) and Mizrahi Tefahot Bank Ltd. (“Mizrahi”) (the “Webster Credit Line”), and (ii) the letter agreement (the “Letter Agreement”) with Valley National Bank (“Valley”) that established a line of credit for MBC Funding II (the “Valley Credit Line”), are presented as an asset on the balance sheet in accordance with ASU 2015-15 (ASC Sub-Topic 835-30) and are amortized over the term of the respective agreements using the straight-line method.

 

Amortization of deferred financing costs is included in interest and amortization of deferred financing costs in the accompanying consolidated statements of operations.

 
Earnings Per Share (“EPS”)

Earnings Per Share (“EPS”)

 

Basic and diluted EPS are calculated in accordance with ASC Topic 260, “Earnings Per Share.” Under ASC Topic 260, basic earnings per share is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS includes the potential dilution from the exercise of stock options and warrants for common shares using the treasury shares method. The numerator in calculating both basic and diluted EPS for each year is the reported net income. There were no outstanding stock options or warrants at December 31, 2025 and 2024.

 
Stock-Based Compensation

Stock-Based Compensation

 

The Company measured and recognized compensation awards for all stock option grants made to employees and directors, based on their fair value in accordance with ASC Topic 718, “Compensation - Stock Compensation” (“ASC Topic 718”), which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. A key provision of this statement is to measure the cost of employee services received in exchange for an award of equity instruments (including stock options) based on the grant-date fair value of the award. The cost will be recognized over the service period during which an employee is required to provide service in exchange for the award (i.e., the requisite service period or vesting period). The Company accounts for equity instruments issued to non-employees in accordance with the provisions of ASC Topic 718 and ASC Sub-Topic 505-50, “Equity-Based Payment to Non-Employees.” All transactions with non-employees in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more appropriately measurable.

 

 
Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

The carrying amounts of the Company’s lines of credit and interest-bearing commercial loans approximate fair value due to the short-term and/or variable-rate nature of these instruments. The fair value of the Notes (when outstanding) was determined using quoted market prices.

 
Recent Accounting Pronouncements

Recent Accounting Pronouncements

 

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements.

 
Reclassifications

Reclassifications

 

Certain amounts included in the December 31, 2024 consolidated financial statements have been reclassified to conform to the December 31, 2025 presentation.