MANHATTAN BRIDGE CAPITAL, INC Debt Disclosure

 

5.	Lines of Credit

 

As of December 31, 2025, the Company was party to an Amended and Restated Credit and Security Agreement with Webster, Flushing, and Mizrahi (the “Lenders”). The Amended and Restated Credit Agreement provides the Company with an aggregate revolving credit line of $32.5 million, secured by assignments of mortgages and other collateral. As of December 31, 2025, the Webster Credit Line was scheduled to mature on February 28, 2026.

 

 

Borrowings under the Webster Credit Line bear interest, at the Company’s election for each drawdown, at either (i) the Secured Overnight Financing Rate (“SOFR”) plus an applicable premium, including a 0.5% agency fee, or (ii) a Base Rate (as defined in the Amended and Restated Credit Agreement) plus 2.00%, plus a 0.5% agency fee. The interest rate on outstanding borrowings fluctuates daily.

 

The Webster Credit Line contains customary covenants and restrictions, including, among others, limitations on borrowings relative to collateral value, requirements to maintain specified financial ratios, limitations on the terms of loans the Company makes to its customers, and restrictions, under certain circumstances, on dividends and share repurchases, asset dispositions, mergers or consolidations, the granting of liens, and transactions with affiliates. The Amended and Restated Credit Agreement also contains a cross-default provision pursuant to which a default under certain indebtedness of the Company or its subsidiary, MBC Funding II, may constitute a default under the Webster Credit Line. Under the Amended and Restated Credit Agreement, the Company may repurchase, redeem or otherwise retire its equity securities in an amount not to exceed ten percent of the Company’s annual net income from the prior fiscal year. The Webster Credit Line also includes restrictions, subject to negotiated exceptions, on additional indebtedness and other restricted payments. In addition, Mr. Ran has provided a personal guaranty of up to $1.0 million, plus enforcement costs, with respect to amounts that may be owed under the Webster Credit Line.

 

On December 12, 2025, MBC Funding II entered into a committed credit facility with Valley, providing for maximum borrowings of up to $10.0 million. The Valley Credit Line is secured by substantially all of the assets of MBC Funding II and is guaranteed by the Company and includes a limited guaranty from Mr. Ran capped at $500,000. Amounts available for borrowing under the Valley Credit Line are subject to a borrowing base based on eligible mortgage loans, as reflected in periodic borrowing base certificates and related schedules delivered to Valley pursuant to the Letter Agreement. Borrowings under the Valley Credit Line bear interest at a floating rate equal to the forward-looking term rate based on SOFR for the applicable interest period (“Term SOFR”), subject to a floor, plus an applicable margin, and are subject to customary fees. The Valley Credit Line matures on December 12, 2027, unless earlier accelerated in accordance with its terms. Borrowings under the Valley Credit Line were used, in part, to fund the redemption of MBC Funding II’s 6.0% Notes in December 2025 (see Note 6).

 

Deferred financing costs incurred to establish and amend the lines of credit are being amortized on a straight-line basis over the terms of the respective agreements. Amortization expense related to these costs was $15,915 and $13,578 for the years ended December 31, 2025 and 2024, respectively.

 

The Company was in compliance with all covenants under the Webster Credit Line, as amended, as of December 31, 2025 and 2024. MBC Funding II was in compliance with all covenants under the Valley Credit Line as of December 31, 2025.

 

As of December 31, 2025, outstanding borrowings under the Webster Credit Line were $11,558,632 and bore interest at a rate of approximately 7.3%, inclusive of the 0.5% agency fee. Outstanding borrowings under the Valley Credit Line were $6,042,500 and bore interest at a rate of approximately 6.7% as of December 31, 2025.

 

 

On February 24, 2026, the Company entered into an amendment to the Amended and Restated Credit Agreement that, among other things, (i) extended the term through March 31, 2026, (ii) provided for the departure of Mizrahi as a lender, and (iii) reallocated revolving commitments among the remaining lenders.

 

On March 24, 2026, the Company entered into an amendment to the Amended and Restated Credit Agreement that, among other things, (i) extended the maturity of the credit facility to February 28, 2029, (ii) modified certain portfolio composition requirements, including limiting mortgage loans outstanding for more than 30 months to 17.5% of the total portfolio, (iii) updated applicable interest margins, and (iv) revised certain mortgage loan eligibility criteria. In connection with the amendment, the Company paid a non-refundable amendment fee of $20,000. Except as amended, all other material terms of the credit facility remain in full force and effect.