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Advances Receivable, net
 12 Months Ended
Jun. 30, 2020
Advances Receivable, net  
Advances Receivable, net

5.            Advances Receivable, net

Total advances receivable, net, as of June 30, 2020, consisted of the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision

 

 

 

 

 

Advance

 

Deferred

 

for Credit

 

Carrying

 

    

Principal

    

Fees

    

Losses

    

Value

 

 

(Amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Merchant cash advances

 

$

1,919

 

$

 —

 

$

(124)

 

$

1,795

Aviation advances

 

 

10,000

 

 

(359)

 

 

 —

 

 

9,641

Advances receivable, net

 

$

11,919

 

$

(359)

 

$

(124)

 

$

11,436

 

Total advances receivable, net, as of June 30, 2019, consisted of the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision

 

 

 

 

 

Advance 

 

Deferred

 

for Credit

 

Carrying

 

    

Principal

    

Fees

    

Losses

    

Value

 

 

(Amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Merchant cash advances

 

$

7,434

 

$

 —

 

$

(736)

 

$

6,698

Aviation advances

 

 

2,750

 

 

(59)

 

 

 —

 

 

2,691

Advances receivable, net

 

$

10,184

 

$

(59)

 

$

(736)

 

$

9,389

 

As of June 30, 2020, 100% of MCAs in which we hold a participation interest were originated through three MCA originators. As of June 30, 2019, 97% of MCAs in which we hold a participation interest were originated through a single originator.

Changes in the allowance for MCA credit losses are as follows (amounts in thousands):

 

 

 

 

 

Allowance for credit losses, July 1, 2018

    

$

 —

Provision for credit losses

 

 

1,605

Receivables charged off

 

 

(869)

Allowance for credit losses, July 1, 2019

 

$

736

Provision for credit losses

 

 

849

Receivables charged off

 

 

(1,624)

Recoveries of receivables previously charged off

 

 

162

Effects of exchange rate differences

 

 

 1

Allowance for credit losses, June 30, 2020

 

$

124

 

During the fiscal years ended June 30, 2020 and 2019, we provided $17,474,000 and $4,750,000 of cash advances, respectively, to fund aircraft purchasers' deposits to purchase aircraft in exchange for paying us a fee and a guaranty of the full repayment obligation from the principal of the third-party business.  These deposits are typically outstanding for less than six months. The prepaid fees are netted against the principal balance, earned over the advance period, and are reported as part of MCA income within the statement of operations. During the fiscal year ended June 30, 2020, we collected $11,250,000 of these advances. Each quarter, we review the carrying value of this cash advance, and determine if an impairment reserve is necessary.