Borrowings

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Borrowings

Borrowings

The following table presents information regarding the Company's Secured Financing facilities:

					September 30, 2023		December 31, 2022
Variable Interest Entity	Facility Amount		Maturity Date	Interest Rate	Balance		Balance
(in thousands)
Oportun CCW Trust (1)	$	120,000	December 1, 2024	Variable (2)	$	71,627	$	76,574
Oportun PLW Trust	600,000		September 1, 2024	Adjusted SOFR + 2.17%	351,539		240,994
Total secured financing	$	720,000			$	423,166	$	317,568

(1) The facility amount and maturity date on the Secured Financing - CCW facility (Oportun CCW Trust) were $150.0 million and December 1, 2023, respectively, as of December 31, 2022.

(2) The interest rate on the Secured Financing - CCW facility (Oportun CCW Trust) is adjusted SOFR plus 3.41% on the outstanding principal balance as of September 30, 2023. The interest rate on the CCW was LIBOR (minimum of 1.00%) plus 6.00% on the first $18.8 million of principal outstanding and LIBOR (minimum of 0.00%) plus 3.41% on the remaining outstanding principal balance as of December 31, 2022.

The following table presents information regarding asset-backed notes:

	September 30, 2023
Variable Interest Entity	Initial note amount issued (1)		Initial collateral balance (2)		Current balance (1)		Current collateral balance (2)		Weighted average interest rate(3)		Original revolving period (4)
(in thousands)
Asset-backed notes recorded at fair value:
Oportun Issuance Trust (Series 2022-3)	$	300,000	$	310,993	$	176,078	$	198,583	9.05	%	N/A
Oportun Issuance Trust (Series 2022-2)	400,000		410,212		172,905		197,279		7.92	%	N/A
Oportun Issuance Trust (Series 2022-A)	400,000		410,211		386,100		415,426		5.59	%	2 years
Oportun Issuance Trust (Series 2021-C)	500,000		512,762		452,212		520,252		2.67	%	3 years
Oportun Issuance Trust (Series 2021-B)	500,000		512,759		456,676		519,687		2.69	%	3 years
Oportun Funding XIV, LLC (Series 2021-A)	375,000		383,632		233,667		253,638		2.56	%	2 years
Oportun Funding XIII, LLC (Series 2019-A)	279,412		294,118		80,635		97,229		3.46	%	3 years
Total asset-backed notes recorded at fair value	$	2,754,412	$	2,834,687	$	1,958,273	$	2,202,094

	December 31, 2022
Variable Interest Entity	Initial note amount issued (1)		Initial collateral balance (2)		Current balance (1)		Current collateral balance (2)		Weighted average interest rate(3)		Original revolving period (4)
(in thousands)
Asset-backed notes recorded at fair value:
Oportun Issuance Trust (Series 2022-3)	$	300,000	$	310,993	$	285,218	$	301,967	8.43	%	N/A
Oportun Issuance Trust (Series 2022-2)	400,000		410,212		313,689		344,218		7.03	%	N/A
Oportun Issuance Trust (Series 2022-A)	400,000		410,211		380,313		414,293		5.44	%	2 years
Oportun Issuance Trust (Series 2021-C)	500,000		512,762		435,951		518,929		2.48	%	3 years
Oportun Issuance Trust (Series 2021-B)	500,000		512,759		432,123		519,182		2.05	%	3 years
Oportun Funding XIV, LLC (Series 2021-A)	375,000		383,632		348,046		389,740		1.79	%	2 years
Oportun Funding XIII, LLC (Series 2019-A)	279,412		294,118		192,334		218,571		3.46	%	3 years
Total asset-backed notes recorded at fair value	$	2,754,412	$	2,834,687	$	2,387,674	$	2,706,900

(1)Initial note amount issued includes notes retained by the Company as applicable. The current balances are measured at fair value for asset-backed notes recorded at fair value.

(2)Includes the unpaid principal balance of loans receivable, the balance of required reserve funds, cash, cash equivalents and restricted cash pledged by the Company.

(3)Weighted average interest rate excludes notes retained by the Company. There were no notes retained by the Company as of June 30, 2023. The weighted average interest rate for Series 2022-2 and Series 2022-3 will change over time as the notes pay sequentially (in class priority order).

(4)The revolving period for Series 2019-A ended on August 1, 2022 and Series 2021-A ended on March 1, 2023. These asset-backed notes have been amortizing since then. Series 2022-2 and Series 2022-3 are both amortizing deals with no revolving period.

Asset-backed borrowings at amortized cost - On June 16, 2023, and August 3, 2023, the Company entered into forward flow whole loan sale agreements and has agreed to sell up to $300 million and $400 million of its personal loan originations over the next twelve months, respectively. The Company will continue to service these loans upon transfer of the receivables. While the economics of these transactions are structured as a whole loan sale, the transfer of these loans receivable does not qualify as a sale for accounting purposes. Accordingly, the related assets remain on the Company's balance sheet and cash proceeds received are reported as a secured borrowing under the caption of asset-backed borrowings at amortized cost with related interest expense recognized over the life of the related borrowing. As part of these agreements, as of September 30, 2023, the Company transferred loans receivable totaling $145.0 million and $105.9 million, respectively.

The following table presents information regarding the Company's Acquisition and Corporate Financings:

					September 30, 2023		December 31, 2022
Entity	Original Balance		Maturity Date	Interest Rate	Balance		Balance
(in thousands)
Oportun Financial Corporation (1)	$	150,000	September 14, 2026	SOFR (minimum of 0.00%) + 12.00%	$	202,484	$	141,957
Oportun RF, LLC (2)	116,000		October 1, 2024	SOFR (minimum of 0.00%) + 11.00%	65,619		80,922
Total acquisition and corporate financings	$	266,000			$	268,103	$	222,879

(1) The Corporate Financing facility (Oportun Financial Corporation) was upsized and amended on March 10, 2023 to provide the ability to be able to borrow up to an additional $75.0 million. The interest rate on the Corporate Financing facility was SOFR (minimum of 0.00%) plus 9.00% as of December 31, 2022.

(2) The Acquisition Financing facility (Oportun RF, LLC) was amended and upsized several times in 2022 increasing the size of the facility to $119.5 million and amending the maturity date. The maturity date and interest rate of the Acquisition Financing facility was May 1, 2024 and SOFR (minimum of 0.00%) plus 8.00% as of December 31, 2022.

On February 10, 2023, the Acquisition Financing facility (Oportun RF, LLC) was further amended, including among other things, revising the interest rate to SOFR plus 11.00% and adjusting the amortization schedule to defer $42.0 million in principal payments through July 2023, with final payment in October 2024.

On March 8, 2023, the Credit Card Warehouse (Oportun CCW Trust) was amended. This amendment, among other things, extends the revolving period by a year, to December 31, 2024, and reduces the commitment amount from $150.0 million to $120.0 million.

On March 10, 2023 (the “Second Amendment Closing Date”), the Company amended its Corporate Financing (Oportun Financial Corporation) facility by entering into an Amendment No. 2 (the “Second Amendment”) by and among the Company, as borrower, the subsidiaries of the Company party thereto as guarantors, certain funds associated with Neuberger Berman Specialty Finance as lenders, and Wilmington Trust, National Association, as administrative agent and collateral agent (the “Agent”), which amended the Credit Agreement, dated as of September 14, 2022 (as amended, supplemented or otherwise modified, including by the Second Amendment, the “Amended Credit Agreement”), by and among the Company, the lenders from time to time party thereto and the Agent.

On the Second Amendment Closing Date, the Company borrowed $20.8 million of incremental term loans (the “Incremental Tranche A-1 Loans”) and borrowed an additional $4.2 million of incremental term loans (the “Incremental Tranche A-2 Loans”) on March 27, 2023. Pursuant to the Second Amendment, the Company issued warrants (the “Warrants”) to the lenders providing the Incremental Tranche A-1 Loans to purchase 1,980,242 shares of the Company’s common stock at an exercise price of $0.01 per share. On March 27, 2023, in connection with the funding of the Incremental Tranche A-2 Loans, the Company issued Warrants to the lenders providing the Incremental Tranche A-2 Loans to purchase 116,485 shares of the Company’s common stock at an exercise price of $0.01 per share.

On May 5, 2023, under the Amended Credit Agreement, the Company borrowed an additional $25.0 million of incremental term loans (the "Incremental Tranche B Loans") and issued Warrants to the lenders to purchase 1,048,363 shares of the Company's common stock at an exercise price of $0.01 per share. The Company determined that the terms of the new debt instrument upon issuance of Tranche B was substantially different when compared to the Original Credit Agreement resulting in an insignificant net loss on debt extinguishment. Accordingly, the Company extinguished the carrying value of the Corporate Financing Facility prior to issuance of Tranche B and recorded the new Corporate Financing Facility upon issuance of Tranche B at fair value of $179.5 million. This resulted in an insignificant net loss on extinguishment.

On June 30, 2023, under the Amended Credit Agreement, the Company borrowed an additional $25.0 million of incremental term loans (the "Incremental Tranche C Loans") and issued Warrants to the lenders to purchase 1,048,363 shares of the Company's common stock at an exercise price of $0.01 per share.

The loans (the “Loans”) and other obligations under the Amended Credit Agreement are secured by the assets of the Company and certain of its subsidiaries guaranteeing the Loans, including pledges of the equity interests of certain subsidiaries that are directly or indirectly owned by the Company, subject to customary exceptions.

Following the Second Amendment Closing Date the Loans bear interest, at (a) an amount equal to 1-month term SOFR plus 9.00% plus (b) an amount payable in cash or in kind, at the Company's option, equal to 3.00%. The Loans are scheduled to mature on September 14, 2026, and are not subject to amortization. Certain prepayments of the Loans are subject to a prepayment premium.

See Note 10, Stockholders' Equity for additional information on the Warrants.

On October 20, 2023, in connection with the closing of a new private structured financing facility (the “Structured Financing Facility”), Oportun CL Trust 2023-A, as borrower, and Oportun, Inc. and Oportun CL Depositor, LLC, each as seller and depositor, respectively, entered into a Receivables Loan and Security Agreement (the “Receivables Loan and Security Agreement”) with certain lenders from time-to-time party thereto (the “Lenders”) and Wilmington Trust, National Association as administrative agent, paying agent and account bank, pursuant to which the borrower borrowed $197 million. Certain funds and affiliates of Castlelake, L.P. (“Castlelake”) participated as Lenders under the Structured Financing Facility. Borrowings under the Receivables Loan and Security Agreement accrue interest at a weighted average interest rate equal to 10.05%.

As of September 30, 2023, and December 31, 2022, the Company was in compliance with all covenants and requirements of the Secured Financing, Acquisition and Corporate Financing facilities and asset-backed notes.