Mill City Ventures Collateralizes $10 Million Loan to Mustang Funding
Mill City Ventures III (NASDAQ:MCVT) has secured a second-position lien on Mustang Funding's assets as collateral for a $10 million loan. The Security Agreement, effective January 24, 2025, was established through an Amended and Restated Subordination and Intercreditor Agreement with Mustang Funding's senior lender.
The loan, initially disbursed between December 2022 and September 2023, has undergone multiple amendments to accommodate business requirements. The collateral arrangement ensures protection of Mill City Ventures' interests while allowing Mustang Funding to maintain access to operational capital.
This agreement aligns with Mill City Ventures' focus on risk-managed, short-term commercial lending strategies and structured finance approach, emphasizing secure, high-yield returns through asset-backed financing.
Mill City Ventures III (NASDAQ:MCVT) ha ottenuto un pegno di secondo grado sugli asset di Mustang Funding come garanzia per un prestito di 10 milioni di dollari. L'Accordo di Sicurezza, efficace dal 24 gennaio 2025, è stato stabilito attraverso un Accordo di Subordinazione e Intercreditore modificato e ripristinato con il prestatore senior di Mustang Funding.
Il prestito, inizialmente erogato tra dicembre 2022 e settembre 2023, ha subito diverse modifiche per soddisfare le esigenze aziendali. L'accordo di garanzia garantisce la protezione degli interessi di Mill City Ventures, consentendo nel contempo a Mustang Funding di mantenere l'accesso a capitali operativi.
Questo accordo si allinea con l'attenzione di Mill City Ventures su strategie di prestito commerciale a breve termine gestite con attenzione ai rischi e approcci di finanza strutturata, enfatizzando rendimenti sicuri e ad alto rendimento attraverso il finanziamento supportato da asset.
Mill City Ventures III (NASDAQ:MCVT) ha conseguido un derecho de primer gravamen de segundo nivel sobre los activos de Mustang Funding como garantía para un préstamo de 10 millones de dólares. El Acuerdo de Seguridad, que será efectivo a partir del 24 de enero de 2025, se estableció a través de un Acuerdo de Subordinación y Acreedor Intermediario Modificado y Restablecido con el prestamista senior de Mustang Funding.
El préstamo, inicialmente desembolsado entre diciembre de 2022 y septiembre de 2023, ha sido objeto de múltiples enmiendas para adaptarse a las necesidades comerciales. El acuerdo de colateral asegura la protección de los intereses de Mill City Ventures al tiempo que permite a Mustang Funding mantener el acceso a capital operativo.
Este acuerdo se alinea con el enfoque de Mill City Ventures en estrategias de préstamos comerciales a corto plazo gestionadas con riesgo y un enfoque de financiamiento estructurado, enfatizando retornos seguros y de alto rendimiento a través de financiamiento respaldado por activos.
밀 시티 벤처스 III (NASDAQ:MCVT)는 1천만 달러 대출의 담보로 머스탱 펀딩의 자산에 대한 2순위 담보권을 확보했습니다. 이 보안 계약은 2025년 1월 24일부터 효력을 발생하며, 머스탱 펀딩의 선순위 대출자와 함께 수정 및 재작성된 후순위 및 채권자 간 계약을 통해 체결되었습니다.
대출은 2022년 12월과 2023년 9월 사이에 초기 분배되었으며, 비즈니스 요구에 맞추기 위해 여러 차례 수정되었습니다. 담보 arrangements는 밀 시티 벤처스의 이익을 보호하는 동시에 머스탱 펀딩이 운영 자본에 접근할 수 있도록 보장합니다.
이 계약은 밀 시티 벤처스가 위험 관리된 단기 상업 대출 전략과 구조화 금융 접근 방식을 강조하며, 자산 기반 금융을 통해 안전하고 높은 수익을 목표로 한다는 점에서 일치합니다.
Mill City Ventures III (NASDAQ:MCVT) a obtenu un privilège de deuxième niveau sur les actifs de Mustang Funding en tant que garantie pour un prêt de 10 millions de dollars. L'Accord de Sécurité, entrant en vigueur le 24 janvier 2025, a été établi par le biais d'un Accord de Subordination et de Créanciers Modifié et Rétabli avec le prêteur senior de Mustang Funding.
Le prêt, initialement distribué entre décembre 2022 et septembre 2023, a subi plusieurs modifications pour s'adapter aux exigences des affaires. L'arrangement de garantie assure la protection des intérêts de Mill City Ventures tout en permettant à Mustang Funding de maintenir son accès à des capitaux opérationnels.
Cet accord est en accord avec l'orientation de Mill City Ventures vers des stratégies de prêt commercial à court terme gérées par le risque et une approche de financement structuré, en mettant l'accent sur des rendements sûrs et à haut rendement par le biais du financement adossé à des actifs.
Mill City Ventures III (NASDAQ:MCVT) hat ein zweitrangiges Pfandrecht an den Vermögenswerten von Mustang Funding als Sicherheiten für ein Darlehen von 10 Millionen Dollar gesichert. Die Sicherheitsvereinbarung, die am 24. Januar 2025 in Kraft tritt, wurde durch eine geänderte und neu gefasste Unterordnungs- und Zwischenkreditvereinbarung mit dem vorrangigen Kreditgeber von Mustang Funding geschaffen.
Das Darlehen, das ursprünglich zwischen Dezember 2022 und September 2023 ausgezahlt wurde, hat mehrere Änderungen erfahren, um den geschäftlichen Anforderungen gerecht zu werden. Die Sicherheitenvereinbarungen gewährleisten den Schutz der Interessen von Mill City Ventures und ermöglichen es Mustang Funding gleichzeitig, Zugang zu Betriebskapital zu behalten.
Diese Vereinbarung steht im Einklang mit dem Fokus von Mill City Ventures auf risikomanagementbasierte, kurzfristige kommerzielle Kreditstrategien und strukturierte Finanzierungsansätze, und betont sichere, hochrentierliche Erträge durch assetgestützte Finanzierung.
- Secured $10 million loan with second-position lien collateral
- Enhanced investment security through asset-backed arrangement
- Maintains high-yield lending strategy with risk mitigation
- Second-position lien status subordinate to senior lender
- Multiple loan amendments suggest potential underlying risks
Insights
The $10 million collateralization agreement represents a significant strategic shift for Mill City Ventures, constituting approximately 51% of its current market capitalization of
Several key aspects warrant attention: First, the timing of this collateralization - occurring after the loan's full disbursement and following a terminated letter of intent - suggests this was a defensive move to strengthen the loan's security structure. Second, the broad asset coverage under the security agreement provides a substantial cushion, though the second-position status means recovery would be subordinate to the senior lender in a default scenario.
For investors, this development carries mixed implications:
- Positive: Enhanced security on a major loan asset, reducing portfolio risk
- Positive: Demonstrates management's ability to negotiate improved terms post-disbursement
- Cautionary: The timing suggests potential concerns about the original loan structure
- Cautionary: Second-lien position limits recovery priority in adverse scenarios
The agreement's broader context reveals Mill City's evolution toward more secured, structured lending - a prudent strategy in the current market environment where risk management is paramount. This move aligns with industry best practices in specialty finance, where collateralization is increasingly emphasized for portfolio protection.
WAYZATA, MN / ACCESS Newswire / February 3, 2025 / Mill City Ventures III, Ltd. (NASDAQ:MCVT) announced today that it has entered into a Security Agreement with Mustang Funding, LLC. Under the Security Agreement, Mill City Ventures obtained a second-position lien on substantially all of Mustang Funding's assets to serve as collateral for Mill City Ventures'
Under the terms of the agreement, Mustang Funding pledged a broad range of assets as collateral for its
"We believe this agreement is a testament to our disciplined approach to structured finance and risk mitigation," said Douglas Polinsky, Chief Executive Officer of Mill City Ventures. "By securing our position with collateral, we are not only enhancing the safety of our investment consistent with market-based commercial lending terms but also demonstrating our commitment to generating value for our shareholders."
Mill City Ventures continues to pursue strategic lending opportunities that provide secure, high-yield returns for its investors. This latest agreement underscores the company's focus on short-term, flexible and commercial-based asset-backed financing as the core elements of overall its investment strategy.
About Mill City Ventures III, Ltd.
Mill City Ventures III, Ltd. (NASDAQ:MCVT) is a specialty finance company focused on short-term lending and structured finance solutions. The company provides capital to businesses through secured loan agreements, offering investors attractive returns with a focus on asset-backed security and risk mitigation.
For more information, visit www.millcityventures3.com or contact:
Investor Relations Contact:
Joseph A. Geraci
Chief Financial Officer
Mill City Ventures III, Ltd.
612-868-5815
jg@millcityventures3.com
SOURCE: Mill City Ventures III Ltd.
View the original press release on ACCESS Newswire
FAQ
What is the value and terms of MCVT's loan to Mustang Funding in 2025?
How is MCVT's $10 million loan to Mustang Funding secured?
When was the original loan from MCVT to Mustang Funding disbursed?
What changes were made to MCVT's loan agreement with Mustang Funding?
