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Advances Receivable, net
 3 Months Ended
Sep. 30, 2020
Advances Receivable, net  
Advances Receivable, net

5.           Advances Receivable, net

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision

 

 

 

 

 

Advance

 

Deferred

 

for Credit

 

Carrying

 

    

Principal

    

Fees

    

Losses

    

Value

 

 

(Amounts in thousands)

Merchant cash advances

 

$

189

 

$

 —

 

$

(14)

 

$

175

Aviation advances

 

 

10,000

 

 

(309)

 

 

 —

 

 

9,691

Advances receivable, net

 

$

10,189

 

$

(309)

 

$

(14)

 

$

9,866

 

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

 

$

(395)

 

$

(124)

 

$

11,436

 

As of September 30, 2020, 100% of MCAs in which we hold a participation interest were funded through a single Funder.  As of June 30, 2020,  100% of MCAs in which we held a participation interest were funded through three Funders.

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

 

 

 

 

 

Allowance for credit losses, July 1, 2020

    

$

124

Provision for credit losses

 

 

52

Receivables charged off

 

 

(81)

Recoveries of receivables previously charged off

 

 

 2

Sale of portfolios

 

 

(84)

Effects of exchange rate differences

 

 

 1

Allowance for credit losses, September 30, 2020

 

$

14

 

 

 

 

Allowance for credit losses, July 1, 2019

 

$

736

Provision for credit losses

 

 

216

Receivables charged off

 

 

(520)

Recoveries of receivables previously charged off

 

 

128

Allowance for credit losses, September 30, 2019

 

$

560

 

During the three months ended September 30, 2020 and 2019, we provided $5,000,000 and $3,000,000 of gross 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 a 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 reported as part of MCA and other financial services income within the accompanying consolidated statements of operations.  During the three months ended September 30, 2020 and 2019, we collected $5,000,000 and $2,750,000, respectively, of these advances.  Each quarter, we review the carrying value of these cash advances and determine if an impairment reserve is necessary.