TWFG, Inc.TWFG
TWFG, Inc. Debt Disclosure
DEBT AND DEFERRED ACQUISITION PAYABLES
The following is a summary of the Company’s outstanding debt and Deferred Acquisition Payables (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Bank Debt: | |||||||||||
| Term Loan | |||||||||||
7-year term loan, periodic interest and monthly principal payments, Daily Simple SOFR + 0.11448% SOFR adjustment, matures December 6, 2027 | $ | 4,007 | $ | 5,919 | |||||||
| Total bank debt | 4,007 | 5,919 | |||||||||
| Less: current bank debt | (1,972) | (1,912) | |||||||||
| Total long-term bank debt | $ | 2,035 | $ | 4,007 | |||||||
Deferred Acquisition Payables(1): | |||||||||||
| Acquisition notes payables | $ | 1,122 | $ | 1,723 | |||||||
| Contingent considerations | 7,052 | — | |||||||||
| Total Deferred Acquisition Payables | 8,174 | 1,723 | |||||||||
| Less: current acquisition notes payables | (593) | (601) | |||||||||
| Less: current contingent considerations | (912) | — | |||||||||
Total long-term Deferred Acquisition Payables(2) | $ | 6,669 | $ | 1,122 | |||||||
| Less: long-term contingent considerations | (6,140) | — | |||||||||
| Total long-term Deferred Acquisition Payables- notes | $ | 529 | $ | 1,122 | |||||||
(1)See Note 4 Intangible Assets and Acquisitions and Note 9 Fair Value Measurements.
(2)Total long-term Deferred Acquisition Payables consists of long-term acquisition notes and long-term contingent considerations.
Future maturities of the Company’s total outstanding bank debt and Deferred Acquisition Payables- notes as of December 31, 2025, were as follows (in thousands):
| 2026 | $ | 2,565 | |||
| 2027 | 2,298 | ||||
| 2028 | 147 | ||||
| 2029 | 119 | ||||
Total | $ | 5,129 | |||
For the years ended December 31, 2025 and 2024, the Company incurred interest expense of $0.3 million and $2.2 million, respectively.
Term Loans
The 7-year term loan was entered into on December 4, 2020, with the original principal of $13.0 million, which matures on December 6, 2027. The Company entered into interest rate swap agreements to manage its exposure to interest rate fluctuations related to its term loans. See Note 6 Derivatives for more information relating to the interest rate swaps associated with these loans.
Revolving Credit Agreement
On May 23, 2023, TWFG Holding, the guarantors party thereto, the lenders party thereto, PNC Bank, National Association (the “Agent”) and PNC Capital Markets LLC entered into a Revolving Credit Agreement (the “Revolving Credit Agreement”) which provides a revolving credit facility to the Company, with commitments in an aggregate principal amount not to exceed $50.0 million, which was amended on June 20, 2024 (as so amended, the “Revolving Facility”). Borrowings constituting revolving loans under the Revolving Credit Agreement incur interest at the Term SOFR Rate (as defined therein) for the applicable interest period plus a margin based on the consolidated leverage ratio of the Company between 2% and 2.75%, and a 0.10% adjustment. On August 6, 2024, in accordance with the Revolving Facility, we became a guarantor of, and granted security interest to secure,
the Revolving Facility. TWFG Holding and the guarantors to the Revolving Credit Agreement entered into a letter agreement, dated October 3, 2024, with the Agent and the lenders party thereto to make changes relating to the debt covenant calculation. The borrowings under the Revolving Facility will be used by the Company for permitted acquisitions, working capital and general corporate purposes.
The Company pays a commitment fee on undrawn amounts under the Revolving Facility of 0.20% to up to 0.35% based on the consolidated leverage ratio. On August 5, 2024, the Company repaid the outstanding balance of its Revolving Facility amounting to $41.0 million using a portion of the net proceeds from the IPO (see Note 1 Organization and Basis of Presentation). As of December 31, 2025 and 2024, the unused capacity under the Revolving Facility was $50.0 million and $50.0 million, respectively.
Borrowings under the term loans and the Revolving Facility are secured by substantially all assets constituting personal property of TWFG and its subsidiaries, including receivables, equipment, and intellectual property, subject to certain exceptions. In addition, the term loan agreement and Revolving Facility contains covenants that restrict the Company’s ability to make certain distributions or dividend payments, incur additional debt, engage in certain asset sales, mergers, acquisitions or similar transactions, create liens on assets, engage in certain transactions with affiliates, change the Company’s business or make investments. In addition, the term loan agreement and Revolving require the Company to maintain certain financial ratios. As of December 31, 2025 and 2024, the Company was in compliance with these covenants. The carrying amount of the Company’s variable rate debt as of December 31, 2025 and December 31, 2024 approximates fair value due to the short-term reset of the interest rate based on SOFR and the absence of a credit spread.
Deferred Acquisition Payables- Notes
In April 2023, the Company acquired customer list intangible assets for a total consideration of $4.3 million, of which $3.0 million was paid in cash at closing. The remaining balance was settled through the issuance of a note payable monthly over three years beginning in April 2024 and bears an annual interest of 3.75%.
In March 2024, the Company acquired customer list intangible assets, of which approximately $0.4 million of the purchase price was settled through the issuance of a non-interest bearing note and was recorded as a Deferred Acquisition Payable. The note is payable monthly over a period of 70 months. The Deferred Acquisition Payable was recorded at fair value with an annual imputed interest rate of 5.00%.
In October 2024, the Company acquired customer list intangible assets, of which approximately $0.4 million of the purchase price was settled through the issuance of a non-interest bearing note and was recorded as a Deferred Acquisition Payable. The note is payable monthly over a period of 60 months. The Deferred Acquisition Payable was recorded at fair value with an annual imputed interest rate of 4.69%.
The portion of the Company’s acquisition-related notes due within 12 months or less from the financial statement date is reported in the Consolidated Balance Sheets as Deferred Acquisition Payables, current, while the amount due after 12 months from the financial statement date is included in Deferred Acquisition Payables, non-current. See Notes 4 Intangible Assets and Acquisitions for more information regarding the purchase of the customer list intangible assets.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 10, 2026 | Showing above |
| 2024 | Mar 27, 2025 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.