FAIR VALUE (Tables)
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9 Months Ended |
Sep. 30, 2023 |
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| Fair Value Disclosures [Abstract] |
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| Fair Value, Assets Measured on Recurring and Nonrecurring Basis |
The following tables present fair value measurements of loans held at fair value as of September 30, 2023 and December 31, 2022: | | | | | | | | | | | | | | | | | | | | | | | | | Fair Value Measurement as of September 30, 2023 | | Total | | Level 1 | | Level 2 | | Level 3 | | Loans held at fair value | $ | 70,010,878 | | | $ | — | | | $ | — | | | $ | 70,010,878 | | | Total | $ | 70,010,878 | | | $ | — | | | $ | — | | | $ | 70,010,878 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | Fair Value Measurement as of December 31, 2022 | | | Total | | Level 1 | | Level 2 | | Level 3 | | Loans held at fair value | $ | 99,226,051 | | | $ | — | | | $ | — | | | $ | 99,226,051 | | | Total | $ | 99,226,051 | | | $ | — | | | $ | — | | | $ | 99,226,051 | |
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| Fair Value Measurements of Changes in Loans using Level 3 inputs |
The following table presents changes in loans that use Level 3 inputs as of and for the nine months ended September 30, 2023: | | | | | | | | Nine months ended
September 30, 2023 | | Total loans using Level 3 inputs at December 31, 2022 | $ | 99,226,051 | | | Realized gains (losses) on loans at fair value, net | (1,213,416) | | | Change in unrealized gains (losses) on loans at fair value, net | (1,152,810) | | | Additional fundings | 1,881,840 | | | Loan repayments | (33,032,561) | | | Accretion of original issue discount | 1,308,253 | | | PIK interest | 2,993,521 | | | Total loans using Level 3 inputs at September 30, 2023 | $ | 70,010,878 | |
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| Fair Value Measurement Inputs and Valuation Techniques |
The following tables summarize the significant unobservable inputs the Company used to value the loans categorized within Level 3 as of September 30, 2023 and December 31, 2022. The tables are not intended to be all-inclusive, but instead capture the significant unobservable inputs relevant to the Company’s determination of fair values. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of September 30, 2023 | | | | | | Unobservable Input | | Fair Value | | Primary Valuation Techniques | | Input | | Estimated Range | | Weighted Average | | Senior term loans | $ | 52,722,454 | | | Yield analysis | | Market yield | | 32.61% - 39.06% | | 34.05% | | Senior term loans | 17,288,424 | | | Market approach | | Revenue multiple | | 0.60x - 0.80x | | 0.70x | | Total investments | $ | 70,010,878 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of December 31, 2022 | | | | | | Unobservable Input | | Fair Value | | Primary Valuation Techniques | | Input | | Estimated Range | | Weighted Average | | Senior term loans | $ | 99,226,051 | | | Yield analysis | | Market yield | | 19.99% - 31.72% | | 21.81% | | Total investments | $ | 99,226,051 | | | | | | | | | |
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| Book Value and Fair Value of the Financial Instruments |
The following table details the book value and fair value of the Company’s financial instruments not recognized at fair value in the unaudited interim consolidated balance sheet as of September 30, 2023: | | | | | | | | | | | | | | As of September 30, 2023 | | | Carrying Value | | Fair Value | | Financial assets: | | | | | Cash and cash equivalents | $ | 73,204,542 | | | $ | 73,204,542 | | | Loans held for investment at carrying value | $ | 308,011,076 | | | $ | 296,997,094 | | | Loan receivable held at carrying value | $ | 2,040,058 | | | $ | 1,020,872 | | | Financial liabilities: | | | | | Senior notes payable, net | $ | 87,864,345 | | | $ | 75,600,000 | |
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