LOANS RECEIVABLE

9 Months Ended

Sep. 30, 2018

Receivables [Abstract]

LOANS RECEIVABLE

LOANS RECEIVABLE

Loans receivable consist of the following:

	September 30, 2018			December 31, 2017
	(in thousands)
SBA 7(a) loans receivable, subject to loan-backed notes	$	38,738		$	—
SBA 7(a) loans receivable, subject to secured borrowings	20,643			21,664
SBA 7(a) loans receivable, subject to credit risk	21,882			58,298
Commercial mortgage loans receivable	—			424
Loans receivable	81,263			80,386
Deferred capitalized costs	1,167			1,132
Loan loss reserves	(532		)	(462		)
Loans receivable, net	$	81,898		$	81,056

SBA 7(a) Loans Receivable, Subject to Loan-Backed Notes—Represents the unguaranteed portions of loans originated under the SBA 7(a) Program which were transferred to a trust and are held as collateral in connection with a securitization transaction. The proceeds received from the transfer are reflected as loan-backed notes payable (Note 7).

SBA 7(a) Loans Receivable, Subject to Secured Borrowings—Represents the government guaranteed portions of loans originated under the SBA 7(a) Program which were sold with the proceeds received from the sale are reflected as secured borrowings—government guaranteed loans. There is no credit risk associated with these loans since the SBA has guaranteed payment of the principal.

SBA 7(a) Loans Receivable, Subject to Credit Risk—Represents the unguaranteed portions of loans originated under the SBA 7(a) Program which were retained by the Company and the government guaranteed portions of such loans that have not yet been fully funded or sold.

Commercial Mortgage Loans Receivable—Represents loans to small businesses primarily collateralized by first liens on the real estate of the related business.

At each of September 30, 2018 and December 31, 2017, 100.0% of our loans subject to credit risk were current. We classify loans with negative characteristics in substandard categories ranging from special mention to doubtful. At September 30, 2018 and December 31, 2017, $0 and $388,000, respectively, of loans subject to credit risk were classified in substandard categories.

At September 30, 2018 and December 31, 2017, our loans subject to credit risk were 97.6% and 97.3%, respectively, concentrated in the hospitality industry.