Mill City Ventures Collateralizes $10 Million Loan to Mustang Funding

Rhea-AI Summary

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.

Positive

• Secured $10 million loan with second-position lien collateral
• Enhanced investment security through asset-backed arrangement
• Maintains high-yield lending strategy with risk mitigation

Negative

• Second-position lien status subordinate to senior lender
• Multiple loan amendments suggest potential underlying risks

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' $10 million principal amount loan to Mustang Funding. [Mill City Ventures also entered into an Amended and Restated Subordination and Intercreditor Agreement with the senior lender to Mustang Funding, and, as earlier announced, contemporaneously amended its Fourth Short-Term Loan Agreement and Fourth Short-Term Promissory Note with Mustang Funding. Mill City Ventures sought collateral for its loan pursuant to provisions that had been negotiated as part of its original lending transaction with Mustang Funding and in connection with its earlier-announced termination of its non-binding letter of intent with Mustang Funding.] The Security Agreement, deemed effective as of January 24, 2025, reinforces Mill City Ventures' commitment to risk-managed, short-term commercial lending strategies.

Under the terms of the agreement, Mustang Funding pledged a broad range of assets as collateral for its $10 million promissory note in favor of Mill City Ventures. This collateral ensures the protection of Mill City Ventures' interests while enabling Mustang Funding and its subsidiaries to continue accessing capital to support business operations. The loan, advanced in stages beginning in December 2022 and ending in September 2023, has been amended multiple times to align with evolving business needs.

"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?

Mill City Ventures (MCVT) provided a $10 million loan to Mustang Funding, secured by a second-position lien on Mustang's assets, effective January 24, 2025.

How is MCVT's $10 million loan to Mustang Funding secured?

The loan is secured through a Security Agreement providing MCVT with a second-position lien on substantially all of Mustang Funding's assets as collateral.

When was the original loan from MCVT to Mustang Funding disbursed?

The loan was advanced in stages, beginning in December 2022 and ending in September 2023.

What changes were made to MCVT's loan agreement with Mustang Funding?

The loan agreement has undergone multiple amendments, including a recent Security Agreement and an Amended and Restated Subordination and Intercreditor Agreement with the senior lender.