0001587987-22-000125 | 10-Q | XBRL Viewer | Newtek Business Services Corp

Servicing assets, at fair value

$ 0

Cash

3,194,000

1,845,000

Restricted cash

1,408,000

Broker receivable

71,634,000

44,537,000

Due from related parties

947,000

4,395,000

33,530,000

28,008,000

Right of use assets

6,381,000

7,310,000

Other assets

1,866,000

595,000

98,045,000

79,788,000

Notes payable - related parties

Bank notes payable

32,341,000

Secured debt

51,916,000

150,000

11,450,000

Due to related parties

1,849,000

1,490,000

Lease liabilities

7,945,000

9,056,000

Deferred tax liabilities

12,908,000

12,733,000

Due to participants

34,660,000

146,225,000

Accounts payable, accrued expenses and other liabilities

183,000

11,840,000

10,935,000

Total liabilities

46,243,000

43,633,000

Commitments and contingencies (Note 9)

Net assets:

Preferred stock (par value $0.02 per share; authorized 1,000 shares, no shares issued and outstanding)

Common stock (par value $0.02 per share; authorized 200,000 shares, 24,425 and 24,159 issued and outstanding, respectively)

485,000

483,000

Additional paid-in capital

370,703,000

367,663,000

Accumulated undistributed earnings

20,611,000

35,741,000

Total net assets

32,519,000

58,928,000

Total liabilities and net assets

$ 85,561,000

$ 91,565,000

Net asset value per common share (in dollars per share)

$ 16.04

$ 16.72

2024 Notes

Notes

$ 37,847,000

$ 37,679,000

14,545,000

29,246,000

112,666,000

112,128,000

ASSETS

488,375,900

^[1],[2],[3]

424,416,900

^[4],[5]

ASSETS

$ 22,949,400

$ 72,970,300

[1]	All of the Company’s investments are in entities which are organized under the Laws of the United States and have a principal place of business in the United States.
[2]	Fair value determined using significant unobservable inputs.
[3]	Newtek values non-accrual SBA 7(a) loans using a discounted cash flow analysis of the underlying collateral which supports the loan. Management’s estimate of the net recovery of collateral, (fair value less cost to liquidate) is applied to the discounted cash flow analysis based upon a time to liquidate estimate. Modified loans are valued based upon current payment streams and are re-amortized at the end of the modification period.
[4]	All of the Company’s investments are in entities which are organized under the Laws of the United States and have a principal place of business in the United States.
[5]	Fair value determined using significant unobservable inputs.

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (Parenthetical) - USD ($)

Sep. 30, 2022

Dec. 31, 2021

Preferred stock, par value (in dollars per share)

$ 79,627,000

$ 84,824,000

$ 0.02

Preferred stock, shares authorized (in shares)

1,000,000

Preferred stock, shares issued (in shares)

Preferred stock, shares outstanding (in shares)

Common stock, par value (in dollars per share)

$ 0.02

Common stock, shares authorized (in shares)

200,000,000

Common stock, shares issued (in shares)

24,425,000

24,159,000

Common shares outstanding at end of period (in shares)

24,425,000

24,159,000

2024 Notes | Medium-term Notes

2025 6.85% Notes | Medium-term Notes

$ 38,250,000

2025 5.00% Notes | Medium-term Notes

15,000,000

2026 Notes | Medium-term Notes

30,000,000

Securitization Trusts | Secured Debt

115,000,000

302,253,000

249,750,000

502,400,100

^[1],[2],[3]

431,970,000

^[4],[5]

Securitization Trusts

438,045,000

344,266,000

$ 21,648,100

$ 65,728,300

[1]	All of the Company’s investments are in entities which are organized under the Laws of the United States and have a principal place of business in the United States.
[2]	Fair value determined using significant unobservable inputs.
[3]	Newtek values non-accrual SBA 7(a) loans using a discounted cash flow analysis of the underlying collateral which supports the loan. Management’s estimate of the net recovery of collateral, (fair value less cost to liquidate) is applied to the discounted cash flow analysis based upon a time to liquidate estimate. Modified loans are valued based upon current payment streams and are re-amortized at the end of the modification period.
[4]	All of the Company’s investments are in entities which are organized under the Laws of the United States and have a principal place of business in the United States.
[5]	Fair value determined using significant unobservable inputs.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Investment income
Interest income	$ 753	$ 594	$ 2,087	$ 1,703
Dividend Income	7,205	0	20,051	51
Servicing income	3,575	2,819	9,931	8,346
Other income	672	0	672	0
Total investment income	3,654	2,635	8,938	8,040
Net realized gain on non-affiliate investments - SBA 7(a) loans			0	31,919
Net unrealized (depreciation) appreciation on investments	7,000	4,500	159	5,870
Expenses:
Salaries and benefits	4,772	2,351	14,380	12,727
Interest	6,917	5,177	17,412	15,217
Depreciation and amortization	58	72	181	236
Professional fees	1,509	1,418	4,322	3,465
Origination and loan processing	2,866	4,586	7,202	10,555
Origination and loan processing - related party	5,430	3,177	14,698	10,830
Loss on extinguishment of debt	0	0	417	955
Other general and administrative costs	1,823	2,322	5,619	5,663
Total expenses	1,410	1,028	5,150	3,952
Net investment (loss) income	2,244	1,607	3,788	4,088
Net realized and unrealized gains (losses):
Net realized gain (loss) on derivative transactions	697	(38)	1,771	(38)
Net unrealized depreciation on servicing assets	(1,624)	(1,616)	(3,964)	(3,322)
Net unrealized appreciation on derivative transactions	1,216	153	1,277	266
Net increase in net assets resulting from operations	$ (1,771)	$ 507	$ (1,789)	$ 1,870
Net increase in net assets resulting from operations per share (in dollars per share)	$ 0.47	$ 0.74	$ 1.43	$ 2.85
Net investment (loss) income per share (in dollars per share)	0.01	(0.30)	(0.04)	1.07
Dividends and distributions declared per common share (in dollars per share)	$ 0.65	$ 0.90	$ 2.05	$ 2.10
Weighted average number of shares outstanding (in shares)	24,299,000	22,541,000	24,204,000	22,468,000
Guaranteed Investments
Investment income
Net unrealized (depreciation) appreciation on investments	$ (297)	$ 123	$ (5,942)	$ 2,533
Unguaranteed Investments
Investment income
Net unrealized (depreciation) appreciation on investments	(3,611)	998	(6,473)	2,583
PPP
Investment income
Interest income	0	269	0	49,989
7(a)
Investment income
Interest income	8,804	7,131	23,915	19,328
Net realized gain on non-affiliate investments - SBA 7(a) loans	$ 14,767	$ 19,272	$ 49,953	$ 38,079

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) - USD ($) $ in Thousands							3 Months Ended		9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Increase in net assets:
Net realized gain on investments							$ 14,767	$ 19,004	$ 50,398	$ 37,811
Net increase in net assets resulting from operations							(1,771)	507	(1,789)	1,870
Dividends to common stockholders	$ (15,325)	$ (17,634)	$ (15,361)	$ (19,895)	$ (15,433)	$ (11,025)	(15,648)	(20,159)	(49,241)	(46,971)
Capital share transactions:
Issuance of common stock under dividend reinvestment plan	323	374	$ 225	264	213	$ 140	324	264	922	618
Stock-based compensation expense							553	299	1,801	1,473
Purchase of vested stock for employee payroll tax withholding							(50)	0	(829)	(1,535)
Issuance of common stock, net of offering costs							726	0	726	8,970
Total increase (decrease) in net assets							(2,733)	(2,982)	(12,088)	26,667
Net assets at beginning of period							394,532	369,002	58,928	339,353
Net assets at end of period	$ 32,519	$ 394,532		$ 366,020	$ 369,002		$ 32,519	$ 366,020	$ 32,519	$ 366,020
Common shares outstanding at end of period (in shares)	24,425,000			22,559,000			24,425,000	22,559,000	24,425,000	22,559,000	24,159,000
Capital share activity:
Shares issued under dividend reinvestment plan (in shares)	21,000	21,000	9,000	10,000	6,000	6,000	20,000	10,000	50,000	22,000
Shares issued in connection with sales of common stock (in shares)							36,000	0	36,000	430,000
Purchase of vested stock for employee payroll tax withholding (in shares)							0	0	(30,000)	(56,000)
Restricted shares issued under Equity Incentive Plan, net of forfeitures (in shares)							182,000	19,000	210,000	192,000
Net increase in capital share activity (in shares)							238,000	29,000	266,000	588,000

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Net unrealized (depreciation) appreciation on investments	$ (7,000)	$ (4,500)	$ (159)	$ (5,870)
Funding of investments			(360)	0
Principal received on investments			0	48
Cash flows from operating activities:
Net increase in net assets resulting from operations	(1,771)	507	(1,789)	1,870
Adjustments to reconcile net increase in net assets resulting from operations to net cash (used in) provided by operating activities:
Net unrealized depreciation on servicing assets	1,624	1,616	3,964	3,322
Net unrealized appreciation on derivative transactions	(1,216)	(153)	(1,277)	(266)
Net realized gain on investments			0	(31,919)
Allowance for doubtful accounts			0	397
Loss on extinguishment of debt	0	0	417	955
Amortization of deferred financing costs			1,891	1,801
Deferred income taxes			175	2,120
Depreciation and amortization	58	72	181	236
Purchase of guaranteed SBA loans			(602)	(9,096)
Proceeds from sale of non-affiliate SBA loans			534,378	1,061,577
Return of investment from controlled investments			9,741	15,000
Other, net			2,174	1,952
Changes in operating assets and liabilities:
Broker receivable			(27,097)	(8,220)
Due to/from related parties			3,807	2,056
Other assets			1,340	3,113
Due to participants			(111,565)	128,752
Accounts payable, accrued expenses and other liabilities			723	465
Capitalized servicing asset			(9,486)	(6,160)
Other, net			7	26
Net cash (used in) provided by operating activities			(127,593)	151,700
Cash flows from investing activities:
Purchase of fixed assets			(11)	0
Cash flows from financing activities:
Net borrowings on bank notes payable			17,500	28,647
Proceeds from common shares sold, net of offering costs			726	8,969
Net repayments under related party line of credit			(11,300)	(24,090)
Payments on Notes Payable - Securitization Trusts			(63,707)	(44,150)
Issuance of Notes Payable - Securitization Trusts			116,210	0
Dividends paid			(48,319)	(46,353)
Additions to deferred financing costs			(2,405)	(4,007)
Purchase of vested stock for employee payroll tax withholding			(829)	(1,535)
Net cash provided by (used in) financing activities			22,876	(19)
Net (decrease) increase in cash and restricted cash			(104,728)	151,681
Cash and restricted cash—beginning of period (Note 2)			186,860	51,425
Cash and restricted cash—end of period (Note 2)	82,132	203,106	82,132	203,106
Non-cash operating, investing and financing activities:
Foreclosed real estate acquired			1,646	1,654
Dividends declared but not paid during the period			2,998	0
Issuance of common shares under dividend reinvestment plan			922	618
2024 Notes
Proceeds from Notes			0	15,000
2025 6.85% Notes
Proceeds from Notes			0	10,000
Redemption of Notes			(15,000)	0
2025 5.00% Notes
Proceeds from Notes			30,000	0
2026 Notes
Proceeds from Notes			0	115,000
2023 Notes
Redemption of Notes			0	(57,500)
Guaranteed Investments
Net unrealized (depreciation) appreciation on investments	297	(123)	5,942	(2,533)
Funding of investments			(441,333)	(1,035,141)
Unguaranteed Investments
Net unrealized (depreciation) appreciation on investments	$ 3,611	$ (998)	6,473	(2,583)
Funding of investments			$ (145,525)	$ (56,429)

CONSOLIDATED SCHEDULE OF INVESTMENTS - USD ($)

Sep. 30, 2022

Dec. 31, 2021

$ 556,748,200

$ 534,532,500

79,627,000

84,824,000

$ 0

Percentage of non-qualifying assets to total assets

200.51%

245.33%

7.00%

7.40%

Federal tax cost of investments

$ 693,600,000

$ 656,000,000

Gross unrealized gains

172,400,000

173,800,000

Gross unrealized losses

$ 72,000,000

$ 62,700,000

Newtek Technology Solutions, Inc. | NBSH Holdings, LLC

1.82%

Newtek Technology Solutions, Inc. | Wilshire Holdings 1, Inc.

100.00%

Newtek Technology Solutions, Inc. | Non-affiliate

50.00%

Automated Merchant Services Inc | Wilshire Partners, LLC

50.00%

Automated Merchant Services Inc | Newtek Business Services Corp

96.11%

CDS Business Services, Inc. | The Whitestone Group, LLC

3.89%

CDS Business Services, Inc. | Wilshire Holdings 1, Inc.

50.15%

PMTWorks Payroll, LLC | The Whitestone Group, LLC

49.85%

PMTWorks Payroll, LLC | Wilshire Holdings 1, Inc.

25.00%

PMTWorks Payroll, LLC | Exponential Business Development Co., Inc.

65.00%

Newtek Business Lending, LLC | Newtek Business Services Holdco 6, Inc.

10.00%

Newtek Merchant Solutions, LLC | NBSH Holdings, LLC

100.00%

Small Business Lending, LLC | Newtek LSP Holdco, LLC

100.00%

Newtek Insurance Agency, LLC | Wilshire Holdings 1, Inc.

100.00%

Titanium Asset Management, LLC | The Whitestone Group, LLC

100.00%

Titanium Asset Management, LLC | Exponential Business Development Co., Inc.

47.80%

Titanium Asset Management, LLC | Wilshire New York Advisers II, LLC

50.00%

Excel WebSolutions, LLC | The Whitestone Group, LLC

2.20%

EMCAP Loan Holdings, LLC | Wilshire Holdings 1, Inc.

100.00%

Mobil Money, LLC | Newtek Business Services Holdco 4, Inc.

4.67%

Newtek Conventional Lending, LLC | Newtek Commercial Lending, Inc.

100.00%

Newtek Conventional Lending, LLC | Conventional Lending TCP Holding, LLC

50.00%

ADR Partners, LLC | Newtek LSP Holdco, LLC

50.00%

POS on Cloud, LLC | Newtek Business Services Holdco 3, Inc.

100.00%

POS on Cloud, LLC | Multiple Non-affiliates

55.47%

50.13%

Biller Genie Software, LLC | Newtek Business Services Corp

49.86%

49.87%

1.82%

Prime Rate

London Interbank Offered Rate (LIBOR)

Investment Interest Rate

4.75%

3.25%

Investment Interest Rate

0.10125%

$ 21,648,100

$ 65,728,300

21,648,100

65,728,300

$ 22,949,400

$ 72,970,300

Guaranteed Investments | Accrual

5.86%

23.59%

$ 16,802,100

^[1]

$ 61,474,100

^[2]

16,802,100

^[1]

61,474,100

^[2]

$ 18,103,000

^[1]

$ 68,716,100

^[2]

Guaranteed Investments | Non-Accrual

4.62%

^[1]

22.22%

^[2]

$ 4,846,000

^[3]

$ 4,254,200

^[4]

4,846,000

^[3]

4,254,200

^[4]

$ 4,846,400

^[3]

$ 4,254,200

^[4]

1.24%

^[3]

0.32%

^[4]

$ 502,400,100

^[5],[6],[7]

$ 431,970,000

^[8],[9]

502,400,100

^[5],[6],[7]

431,970,000

^[8],[9]

$ 488,375,900

^[5],[6],[7]

$ 424,416,900

^[8],[9]

Unguaranteed Investments | Accrual

124.65%

^[5],[6],[7]

137.22%

^[8],[9]

$ 443,542,400

^[5],[10]

$ 377,844,500

^[11]

443,542,400

^[5],[10]

377,844,500

^[11]

$ 457,261,400

^[5],[10]

$ 393,910,100

^[11]

Unguaranteed Investments | Non-Accrual

116.71%

^[5],[10]

127.36%

^[11]

$ 58,857,700

^[5],[7],[12]

$ 54,125,500

^[13],[14]

58,857,700

^[5],[7],[12]

54,125,500

^[13],[14]

$ 31,114,500

^[5],[7],[12]

$ 30,506,800

^[13],[14]

Organization, Consolidation and Presentation of Financial Statements [Abstract]

7.94%

^[5],[7],[12]

9.86%

^[13],[14]

[1]	Newtek values guaranteed accrual SBA 7(a) loans using the secondary SBA 7(a) market as a reference point. Newtek routinely sells accrual SBA 7(a) loans into this secondary market. Guaranteed portions of SBA 7(a) loans partially funded as of the valuation date are valued using level two inputs as disclosed in NOTE 6—FAIR VALUE MEASUREMENTS.
[2]	Newtek values guaranteed accrual SBA 7(a) loans using the secondary SBA 7(a) market as a reference point. Newtek routinely sells accrual SBA 7(a) loans into this secondary market. Guaranteed portions of SBA 7(a) loans partially funded as of the valuation date are valued using level two inputs as disclosed in NOTE 6—FAIR VALUE MEASUREMENTS.
[3]	Newtek values guaranteed non-accrual loans based on the estimated recovery under the SBA guarantee, which is at cost.
[4]	Newtek values guaranteed non-accrual loans based on the estimated recovery under the SBA guarantee, which is at cost.
[5]	All of the Company’s investments are in entities which are organized under the Laws of the United States and have a principal place of business in the United States.
[6]	Fair value determined using significant unobservable inputs.
[7]	Newtek values non-accrual SBA 7(a) loans using a discounted cash flow analysis of the underlying collateral which supports the loan. Management’s estimate of the net recovery of collateral, (fair value less cost to liquidate) is applied to the discounted cash flow analysis based upon a time to liquidate estimate. Modified loans are valued based upon current payment streams and are re-amortized at the end of the modification period.
[8]	All of the Company’s investments are in entities which are organized under the Laws of the United States and have a principal place of business in the United States.
[9]	Fair value determined using significant unobservable inputs.
[10]	Newtek values each unguaranteed portion of SBA 7(a) accrual loans (“Loan”) using a discounted cash flow analysis which projects future cash flows and incorporates projections for Loan pre-payments and Loan defaults using historical portfolio data. The data predicts future prepayment and default probability on curves which are based on Loan age. The recovery assumption for each Loan is specific to the discounted valuation of the collateral supporting that Loan. Each Loan’s cash flow is discounted at a rate which approximates a market yield. The Loans were originated under the SBA 7(a) program and conform to the underwriting guidelines in effect at their time of origination. Newtek has been awarded PLP status from the SBA. Portions of these Loans are not guaranteed by the SBA. Individual loan participations can be sold to institutions which have been granted an SBA 750 license. Loans can also be sold as a pool of loans in a security form to qualified investors.
[11]	Newtek values each unguaranteed portion of SBA 7(a) accrual loans (“Loan”) using a discounted cash flow analysis which projects future cash flows and incorporates projections for Loan pre-payments and Loan defaults using historical portfolio data. The data predicts future prepayment and default probability on curves which are based on Loan age. The recovery assumption for each Loan is specific to the discounted valuation of the collateral supporting that Loan. Each Loan’s cash flow is discounted at a rate which approximates a market yield. The Loans were originated under the SBA 7(a) program and conform to the underwriting guidelines in effect at their time of origination. Newtek has been awarded PLP status from the SBA. Portions of these Loans are not guaranteed by the SBA. Individual loan participations can be sold to institutions which have been granted an SBA 750 license. Loans can also be sold as a pool of loans in a security form to qualified investors.
[12]	Non-income producing security.
[13]	Newtek values non-accrual SBA 7(a) loans using a discounted cash flow analysis of the underlying collateral which supports the loan. Management’s estimate of the net recovery of collateral, (fair value less cost to liquidate) is applied to the discounted cash flow analysis based upon a time to liquidate estimate. Modified loans are valued based upon current payment streams and are re-amortized at the end of the modification period.
[14]	Non-income producing security.

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2022

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

NOTE 1—DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION:

Newtek Business Services Corp. is a Maryland corporation which was formed in August 2013 and is an internally managed, closed end, non-diversified investment company. The Company’s investment strategy is to maximize the investment portfolio’s return by generating current income from the debt investments the Company makes and generate dividend income from equity investments in controlled portfolio companies. On August 2, 2021, the Company entered into the Stock Purchase Agreement with NBNYC and certain NBNYC shareholders to acquire all of the issued and outstanding stock of NBNYC (the “Acquisition”). Subject to certain regulatory approvals (the “Regulatory Approvals”), the Acquisition is part of the Company's plan to reposition itself as a bank holding company that intends to elect financial holding company status. In connection with this plan, on June 1, 2022, at a special meeting of Company shareholders, the Company received its shareholders’ approval to discontinue the Company's election as a business development company, as required under the 1940; however, the Company’s Board will not seek to discontinue the Company’s election as a BDC under the 1940 Act until after the Company receives the required regulatory approvals for the Acquisition and after certain of the Acquisition closing conditions are met. The final decision on the timing of the Company’s discontinuance from regulation as a BDC will be made by the Board based on such factors deemed appropriate by the Board, including the then current status of the Acquisition and discussions with applicable regulatory authorities. After the Company’s discontinuance from regulation as a BDC, the Company will no longer be subject to the regulatory provisions of the 1940 Act applicable to BDCs, will no longer qualify as a RIC, and therefore will be treated differently from both a tax and regulatory perspective. Newtek currently estimates that it will maintain its status as a BDC and RIC in the near term, and therefore expects to maintain its current dividend policy with the objective of making quarterly distributions in an amount that approximates 90 - 100% of the Company's annual taxable income. See "Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations— Executive Summary."

The Company has formed certain Taxable Subsidiaries, which are taxed as corporations for federal income tax purposes. These Taxable Subsidiaries allow the Company to hold equity securities of portfolio companies organized as pass-through entities while continuing to satisfy the requirements of a RIC under the Code.

The following wholly-owned subsidiaries are consolidated in the financial statements of the Company:


Newtek Small Business Finance, LLC
Newtek Asset Backed Securities, LLC
CCC Real Estate Holdings, LLC
The Whitestone Group, LLC
Wilshire DC Partners, LLC
Wilshire Holdings I, Inc.1
Wilshire Louisiana BIDCO, LLC
Wilshire Louisiana Partners II, LLC
Wilshire Louisiana Partners III, LLC
Wilshire Louisiana Partners IV, LLC
Wilshire New York Advisers II, LLC
Wilshire New York Partners III, LLC
Wilshire Partners, LLC
Exponential Business Development Co., Inc.1
Newtek Commercial Lending, Inc.1
Newtek LSP Holdco, LLC
NBSH Holdings, LLC
Newtek Business Services Holdco 1, Inc.1 (surviving entity of January 2021 merger with Newtek Business Services Holdco 2, Inc.)
Newtek Business Services Holdco 3, Inc.1
Newtek Business Services Holdco 4, Inc.1
Newtek Business Services Holdco 5, Inc.1 (formerly Banc-Serv Acquisition, Inc.)
Newtek Business Services Holdco 6, Inc.1

(1) Taxable Subsidiaries

Except as otherwise noted, all financial information included in the tables in the following footnotes is stated in thousands, except per share data.

The accompanying notes to the unaudited condensed consolidated financial statements should be read in conjunction with Newtek’s Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 1, 2022. The unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. GAAP and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X and, therefore, omit or condense certain footnotes and other information normally included in financial statements prepared in accordance with U.S. GAAP. In the opinion of management, the condensed consolidated financial statements reflect all adjustments and reclassifications that are necessary for the fair presentation of financial results as of and for the periods presented. The results of operations for an interim period may not give a true indication of the results for the entire year. The December 31, 2021 consolidated statement of assets and liabilities has been derived from the audited financial statements as of that date. All intercompany balances and transactions have been eliminated in consolidation.

SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES:

Fair Value

The Company applies fair value accounting to certain of its financial instruments in accordance with ASC Topic 820 — Fair Value Measurement (“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC Topic 820, the Company has categorized its financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy. Fair value is a market-based measure considered from the perspective of the market participant who holds the financial instrument rather than an entity-specific measure. Therefore, when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that management believes market participants would use in pricing the financial instrument at the measurement date.

The availability of observable inputs can vary depending on the financial instrument and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new, whether the product is traded on an active exchange or in the secondary market and the current market conditions. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for financial instruments classified as Level 3.

Any changes to the valuation methodology are reviewed by management and the Board to confirm that the changes are appropriate. As markets change, new products develop and the pricing for products becomes more or less transparent, the Company will continue to refine its valuation methodologies. See further description of fair value methodology in NOTE 6—FAIR VALUE MEASUREMENTS.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expense during the reporting period. The level of uncertainty in estimates and assumptions increases with the length of time until the underlying transactions are complete. Actual results could differ from those estimates.

Consolidation

As provided under ASC Topic 946 — Investment Companies, the Company will generally not consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company.

Assets related to transactions that do not meet ASC Topic 860 — Transfers and Servicing (“ASC Topic 860”) requirements for accounting sale treatment are reflected in the Company’s consolidated statements of assets and liabilities as investments. Those assets are owned by the securitization trusts and are included in the Company’s consolidated financial statements. The creditors of the special purpose entities have received security interests in such assets and such assets are not intended to be available to the creditors of the Company.

Although the Company owns more than 25% of the voting securities of NCL, the Company does not have sole control over significant actions of NCL for purposes of the 1940 Act or otherwise, and does not consolidate its interest in NCL.

Distributions

Dividends and distributions to the Company's common stockholders are recorded on the declaration date. The timing and amount to be paid out as a dividend or distribution is determined by the Company's Board each quarter and is generally based upon the annual taxable earnings estimated by management.

Cash

The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. Invested cash is held exclusively at financial institutions of high credit quality. As of September 30, 2022, cash deposits in excess of insured amounts totaled $43.7 million. The Company has not experienced any losses with respect to cash balances in excess of insured amounts and management does not believe there was a significant concentration of risk with respect to cash balances as of September 30, 2022.

Restricted Cash

Restricted cash includes amounts due on SBA loan-related remittances to third parties, cash reserves established as part of a voluntary agreement with the SBA, cash reserves associated with securitization transactions, and cash margin as collateral for derivative instruments. As of September 30, 2022, total restricted cash was $74.8 million.

The following table provides a reconciliation of cash and restricted cash as of September 30, 2022 and 2021 and December 31, 2021 and 2020:


	September 30, 2022		September 30, 2021		December 31, 2021		December 31, 2020
Cash	$	7,355	20,193		2,397		$	2,073
Restricted cash	74,777		182,913		184,463		49,352
Cash and restricted cash	$	82,132	$	203,106	$	186,860	$	51,425

Broker Receivable

Broker receivable represents amounts due from third parties for loans which have been traded at period end but have not yet settled.

Transfers of Financial Assets

For a transfer of financial assets to be considered a sale, the transfer must meet the sale criteria of ASC 860, which, at the time of the transfer, require that the transferred assets qualify as recognized financial assets and the Company surrender control over the assets. Such surrender requires that the assets be isolated from the Company, even in bankruptcy or other receivership, the purchaser have the right to pledge or sell the assets transferred and the Company not have an option or obligation to reacquire the assets. If the sale criteria are not met, the transfer is considered to be a secured borrowing, the assets remain on the Company’s consolidated balance sheets and the sale proceeds are recognized as a liability.

Since 2010, NSBF has engaged in securitizations of the unguaranteed portions of its SBA 7(a) loans. A securitization uses a special purpose entity (the “Trust”), which is considered a variable interest entity. Applying the consolidation requirements for VIEs under the accounting rules in ASC Topic 860, Transfers and Servicing, and ASC Topic 810, Consolidation, which became effective January 1, 2010, the Company determined that as the primary beneficiary of the securitization vehicle, based on its power to direct activities through its role as servicer for the Trust and its obligation to absorb losses and right to receive benefits, it needed to consolidate the Trusts. The Company therefore consolidates the entities using the carrying amounts of the Trust’s assets and liabilities and reflects the assets in SBA Unguaranteed Non-Affiliate Investments and reflects the associated financing in Notes Payable - Securitization trusts on the Consolidated Statements of Assets and Liabilities.

Servicing Assets

The Company accounts for servicing assets in accordance with ASC Topic 860-50 - Transfers and Servicing - Servicing Assets and Liabilities. Servicing assets are measured at fair value at each reporting date and the Company reports changes in the fair value of servicing assets in earnings in the period in which the changes occur. The Company earns servicing fees from the guaranteed portions of SBA 7(a) loans it originates and sells. The valuation model for servicing assets incorporates assumptions including, but not limited to, servicing costs, discount rate, prepayment rate, and default rate. Considerable judgement is required to estimate the fair value of servicing assets and as such these assets are classified as Level 3 in our fair value hierarchy.

Due to Participants

Due to participants represents amounts due to third party investors in the SBA guaranteed portion of SBA 7(a) and PPP loans. When the Company receives principal payments, including PPP loan forgiveness, after the loan has been either partially or fully sold to the participant, the remittances received by the Company are either owed in part of in full to the participant and amounts are recorded as a liability on the consolidated statements of assets and liabilities.

Derivative Instruments

The Company uses derivative instruments primarily to economically manage the fair value variability of fixed rate assets caused by interest rate fluctuations. Derivative instruments consist of interest rate futures and are held at fair value on the balance sheet. Collateral posted with our futures counterparties is segregated in the Company’s books and records. Interest rate futures are centrally cleared by the Chicago Mercantile Exchange (“CME”) through a futures commission merchant. Interest rate futures that are governed by an ISDA agreement provide for bilateral collateral pledging based on the counterparties’ market value. The counterparties have the right to re-pledge the collateral posted but have the obligation to return the pledged collateral, or, if the Company agrees, substantially the same collateral as the market value of the interest rate futures change.

The Company is required to post initial margin and daily variation margin for interest rate futures that are centrally cleared by CME. CME determines the fair value of our centrally cleared futures, including daily variation margin. Effective January 3, 2017, CME amended its rulebooks to legally characterize daily variation margin payments for centrally cleared interest rate futures as settlement rather than collateral. As a result of this rule change, variation margin pledged on the Company’s centrally cleared interest rate futures is settled against the realized results of these futures.

Income Taxes

Deferred tax assets and liabilities are computed based upon the differences between the financial statement and income tax basis of assets and liabilities using the enacted tax rates in effect for the year in which those temporary differences are expected to be realized or settled. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized.

The Company’s U.S. federal and state income tax returns prior to fiscal year 2018 are generally closed, and management continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings.

The Company has elected to be treated as a RIC under the Code beginning with the 2015 tax year and operates in a manner so as to continue to qualify for the tax treatment applicable to RICs. The RIC tax return includes Newtek Business Services Corp. and NSBF, a single member LLC disregarded for tax purposes. None of the Company’s other subsidiaries are included in the RIC tax return. The Company will evaluate and record any deferred tax assets and liabilities of the subsidiaries that are not included in the RIC tax return. In order to maintain its RIC tax treatment, among other things, the Company is required to meet certain source of income and asset diversification requirements and timely distribute to its stockholders at least 90% of investment company taxable income, as defined by the Code, for each tax year. The Company intends to make the requisite distributions to its stockholders, which will generally relieve the Company from U.S. federal income taxes with respect to any income that is distributed to its stockholders as dividends. If the Company obtains the required Regulatory Approvals and subsequently discontinues its election to be treated as a BDC and converts to a bank holding company, the Company will no longer be subject to the 1940 Act, and the Company would lose its ability to be taxed on a pass-through basis as a RIC. For information on the risks of converting to a bank holding company, see “Item 1A. Risk Factors – Risk Related to Converting to a Financial Holding Company” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 1, 2022.

Depending on the level of taxable income earned in a tax year, the Company may choose to retain taxable income in excess of current year dividend distributions and would distribute such taxable income in the next tax year. The Company would then pay a 4% excise tax on such income, as required. To the extent that the Company determines that its estimated current year annual taxable income, determined on a calendar year basis, could exceed estimated current calendar year dividend distributions, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned. For the nine months ended September 30, 2022 and 2021, no U.S. federal excise taxes were due.

The Company’s Taxable Subsidiaries accrue income taxes payable based on the applicable corporate rates on the net unrealized appreciation generated by the controlled investments held by the Taxable Subsidiaries. Such deferred tax liabilities amounted to $12.9 million and $12.7 million at September 30, 2022 and December 31, 2021, respectively, and are recorded as deferred tax liabilities on the consolidated statements of assets and liabilities. The change in deferred tax liabilities is included as a component of net unrealized appreciation (depreciation) on investments in the consolidated statements of operations.

Stock Repurchase Program

On June 21, 2022, the Company's Board of Directors approved a repurchase program under which the Company may repurchase up to 500,000 shares of the Company’s common stock, par value $0.02 per share, through open market purchases, including block purchases, in such manner as will comply with the provisions of the Investment Company Act of 1940 and the Securities Exchange Act of 1934, as amended. Unless extended or terminated by the Company's board of directors, the Company expects the termination date for the repurchase program will be on December 21, 2022. The Company has not repurchased any common shares under the repurchase program during the nine months ended September 30, 2022.

Investment Income

Management reviews all loans that become 90 days or more past due on principal or interest or when there is reasonable doubt that principal or interest will be collected for possible placement on management’s designation of non-accrual status. Interest receivable is analyzed regularly and may be reserved against when deemed uncollectible. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current, although we may make exceptions to this general rule if the loan has sufficient collateral value and is in the process of collection.

On March 27, 2020, Congress passed, and the President of the United States signed into law, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The CARES Act provided an over $2.0 trillion stimulus package to certain businesses and individuals affected by the COVID-19 pandemic, with subsidies to certain existing SBA 7(a) borrowers in which the SBA paid all principal, interest, and fees on existing performing SBA 7(a) loans for six months beginning with such borrowers’ April 2020 payments. Among other things, the CARES Act allowed NSBF, as an SBA 7(a) lender, to originate loans under the Paycheck Protection Program (“PPP”) as an expansion of the existing SBA Section 7(a) loan program through June 30, 2020, which PPP was extended through May 31, 2021, with PPP lenders allowed to continue to close PPP loans approved by the SBA prior to May 31, 2021. Pursuant to the PPP, the SBA reimbursed NSBF for originating PPP loans and such SBA reimbursements are included as interest income on PPP loans. Such fees were accounted for under ASC-310 Receivables and deferred until the PPP loan participations were sold to one of the banks which had entered into PPP loan participation agreements with NSBF. Refer to NOTE 3—INVESTMENTS. Income earned in connection with the PPP should not be viewed as recurring. NSBF funded the balance of its PPP loans in July 2021.

Dividend income is recognized on an accrual basis for preferred equity securities to the extent that such amounts are expected to be collected or realized. In determining the amount of dividend income to recognize, if any, from cash distributions on common equity securities, we will assess many factors including a portfolio company’s cumulative undistributed income and operating cash flow. Cash distributions from common equity securities received in excess of such undistributed amounts are recorded first as a reduction of our investment and then as a realized gain on investment.

The Company earns servicing income related to the guaranteed portions of SBA loan investments which it sells into the secondary market. These recurring fees are earned and recorded daily. Servicing income is earned for the full term of the loan or until the loan is repaid.

The Company earns a variety of fees from borrowers in the ordinary course of conducting its business, including packaging, legal, late payment and prepayment fees. All other income is recorded when earned. Other income is generally non-recurring in nature and earned as “one time” fees in connection with the origination of new debt investments with non-affiliates.

Investment transactions are accounted for on a trade-date basis. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the cost basis of investment, without regard to unrealized gains or losses previously recognized. The Company reports current period changes in the fair value of investments as a component of the net change in unrealized appreciation (depreciation) on investments in the consolidated statements of operations.

Stock – Based Compensation

The Company accounts for its equity-based compensation plan using the fair value method, as prescribed by ASC Topic 718 – Stock Compensation. Accordingly, for restricted stock awards, the Company measures the grant date fair value based upon the market price of the Company’s common stock on the date of the grant and amortizes this fair value to salaries and benefits ratably over the requisite service period or vesting term.

Recently Adopted Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts and transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, “Reference Rate Reform (Topic 848),” which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition. ASU 2020-04 and ASU 2021-01 are effective as of March 12, 2020 through December 31, 2022. ASU No. 2021-01 provides increased clarity as the Company continues to evaluate the transition of reference rates, however, the impact of the adoption is not expected to be material. The adoption of ASU 2020-04 did not have a material impact on the Company’s consolidated financial statements.

In November 2020, the SEC published Release No. IC-34084, Use of Derivatives by Registered Investment Companies and Business Development Companies, and adopted rules amending Rule 18f-4 and Rule 6c-11. Under the newly adopted rules, BDCs that use derivatives will be subject to a value-at-risk leverage limit, a derivatives risk management program and certain testing and board reporting requirements. These new requirements will apply unless the BDC qualifies as a “limited derivatives user,” as defined under the adopted rules, provided that the BDC adopts written policies and procedures that are reasonably designed to manage the BDC’s derivatives risks and comply with certain record keeping requirements. Under the new rule, a BDC may enter into an unfunded commitment agreement that is not a derivatives transaction, such as an agreement to provide financing to a portfolio company, if the BDC has, among other things, a reasonable belief, at the time it enters into such an agreement, that it will have sufficient cash and cash equivalents to meet its obligations with respect to all of its unfunded commitment agreements, in each case as it becomes due. The Company currently qualifies as a “limited derivatives user” and expects to continue to do so and has adopted written policies and procedures that are reasonably designed to manage the Company’s derivatives risks and comply with the record keeping requirements.

In December 2020, Rule 2a-5 under the 1940 Act was adopted by the SEC and establishes requirements for determining fair value in good faith for purposes of the 1940 Act. The adoption of Rule 2a-5 did not have a material impact on the consolidated financial statements.

New Accounting Standards

In June 2022, the FASB issued ASU No. 2022-03, “Fair Value Measurement (Topic 820),” which clarifies the guidance in Topic 820 when measuring the fair value of an equity security subject to contractual restrictions that prohibit

the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The amendments affect all entities that have investments in equity securities measured at fair value that are subject to a contractual sale restriction. ASU 2022-03 is effective for public business entities for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. For all other entities the amendments are effective for fiscal years beginning after December 15, 2024, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. An entity that qualifies as an investment company under Topic 946 should apply the amendments in ASU No. 2022-03 to an investment in an equity security subject to a contractual sale restriction that is executed or modified on or after the date of adoption. The Company is currently evaluating the impact of adopting ASU No. 2022-03 on the consolidated financial statements.

Segments

The Company has determined that it has a single reporting segment and operating unit structure. The Company issues debt and makes equity investments in portfolio companies in various industries. The Company separately evaluates the performance of each of its lending and investment relationships. However, because each of these debt and equity investment relationships have similar business and economic characteristics, they have been aggregated into a single lending and investment segment.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

INVESTMENTS

9 Months Ended

Sep. 30, 2022

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS

NOTE 3—INVESTMENTS:

Investments, all of which are in portfolio companies in the United States, consisted of the following at:


	September 30, 2022				December 31, 2021
	Cost		Fair Value		Cost		Fair Value

Non-affiliate debt investments	$	524,048	$	511,325	$	497,698	$	497,387
Non-control investments:
Equity	1,360		1,360		1,000		1,000

Controlled investments:
Equity	118,125		237,630		93,717		208,106
Equity interest in NCL (Joint Venture)	17,412		16,260		26,903		29,464
Debt	32,700		19,038		36,669		22,828
Total investments	$	693,645	$	785,613	$	655,987	$	758,785

SBA unguaranteed investments consisted of the following breakdown of accrual and non-accrual loans at:


	September 30, 2022				December 31, 2021
	Cost		Fair Value		Cost		Fair Value
Accrual	$	443,542	$	457,261	$	377,845	$	393,910
Non-Accrual	58,858		31,115		54,125		30,507
Total SBA unguaranteed investments	$	502,400	$	488,376	$	431,970	$	424,417

SBA guaranteed investments consisted of the following breakdown of accrual and non-accrual loans at:


	September 30, 2022				December 31, 2021
	Cost		Fair Value		Cost		Fair Value
Accrual	$	16,802	$	18,103	$	61,474	$	68,716
Non-Accrual	4,846		4,846		4,254		4,254
Total SBA guaranteed investments	$	21,648	$	22,949	$	65,728	$	72,970

Beginning in March 2020, as a result of the uncertain economic impact to U.S. small businesses at the onset of the COVID-19 pandemic, the Company’s Executive Committee and Lending Team temporarily shifted the focus of NSBF from originating SBA 7(a) loans to originating PPP loans. During the duration of the PPP through the end of July 2021, NSBF funded approximately 26,200 PPP loans totaling $1.9 billion. Beginning in July 2021, NSBF redeployed resources to funding SBA 7(a) loans.

To facilitate NSBF’s involvement as an authorized lender in the PPP, during the second quarter of 2020, NSBF entered into PPP loan participation agreements where NSBF originated PPP loans and sold participating interests to several participants. One participant continues to hold a 90% participation interest in 1 of the 2 PPP loans that remain as of September 30, 2022. NSBF continues to hold the PPP loan notes and the PPP loan documents for PPP loans yet to be forgiven by the SBA, in order to service the loans and facilitate the PPP loan forgiveness process. NSBF has agreed that it will repurchase the participant’s percentage of the outstanding principal and interest under certain circumstances, including any failure to recover under the SBA guarantee as a result of any deficiency in documenting or servicing such PPP Loan by NSBF. The servicing liability in connection with the PPP loans was deemed immaterial. PPP loan origination fees was recognized as interest income on sale of

PPP loan participations. Income earned in connection with the PPP should not be viewed as recurring. NSBF funded the balance of its PPP loans by the end of July 2021. NSBF has redeployed resources to funding SBA 7(a) loans.

The following table shows the Company’s SBA guaranteed accrual loans by SBA loan type at:


	September 30, 2022				December 31, 2021
	Cost		Fair Value		Cost		Fair Value
7(a)	$	16,727	$	18,028	$	60,610	$	67,852
PPP	75		75		864		864
Accrual SBA guaranteed investments	$	16,802	$	18,103	$	61,474	$	68,716

The following table shows the Company’s portfolio investments by industry at:


	September 30, 2022				December 31, 2021
	Cost		Fair Value		Cost		Fair Value
Data Processing, Hosting, and Related Services	$	61,083	$	164,722	$	59,552	$	169,043
Securities, Commodity Contracts, and Other Financial Investments and Related Activities	88,769		88,628		69,473		60,553
Food Services and Drinking Places	48,101		49,595		48,782		51,840
Specialty Trade Contractors	37,271		35,165		25,250		24,745
Professional, Scientific, and Technical Services	35,799		34,338		27,374		27,213
Amusement, Gambling, and Recreation Industries	27,886		29,565		28,806		29,578
Ambulatory Health Care Services	27,902		26,265		23,078		21,483
Administrative and Support Services	22,869		21,908		25,320		25,036
Truck Transportation	24,437		20,685		24,929		21,937
Merchant Wholesalers, Durable Goods	19,212		19,362		14,725		15,107
Repair and Maintenance	16,536		16,924		18,301		18,752
Merchant Wholesalers, Nondurable Goods	17,589		16,877		12,649		12,115
Personal and Laundry Services	12,415		12,945		11,218		11,935
Fabricated Metal Product Manufacturing	12,407		12,827		15,138		16,104
Construction of Buildings	11,358		10,588		6,404		5,909
Social Assistance	9,100		9,791		12,967		14,401
Accommodation	10,684		9,691		13,795		13,529
Support Activities for Mining	10,543		9,623		12,760		11,427
Rental and Leasing Services	8,910		9,080		8,529		8,505
Motor Vehicle and Parts Dealers	9,116		9,066		12,435		13,016
Nursing and Residential Care Facilities	8,194		8,837		4,781		5,206
Transportation Equipment Manufacturing	7,697		8,044		9,599		10,461
Building Material and Garden Equipment and Supplies Dealers	7,637		7,990		6,504		6,845
Food Manufacturing	9,484		7,823		12,760		11,427
NCL (Joint Venture)	17,412		16,260		26,903		29,464
Other	131,234		129,014		123,955		123,154
Total	$	693,645	$	785,613	$	655,987	$	758,785

The Company’s Non-Conforming Conventional Loan Program

Newtek Conventional Lending, LLC (NCL): On May 20, 2019, the Company and its joint venture partner launched NCL to provide non-conforming conventional commercial and industrial term loans to U.S. middle-market companies and small businesses. NCL is a 50/50 joint venture between Newtek Commercial Lending, Inc. a wholly-owned subsidiary of Newtek, and Conventional Lending TCP Holding, LLC, a wholly-owned, indirect subsidiary of BlackRock TCP Capital Corp. (Nasdaq:TCPC). NCL ceased funding new non-conventional conforming loans during 2020. On January 28, 2022, NCL closed a conventional commercial loan securitization with the sale of $56.3 million of Class A Notes, NCL Business Loan Trust 2022-1, Business Loan-Backed Notes, Series 2022-1, secured by a segregated asset pool consisting primarily of NCL’s portfolio of conventional commercial business loans, including loans secured by liens on commercial or residential mortgaged properties, originated by NCL and NBL. The Notes were rated “A” (sf) by DBRS Morningstar. The Notes were priced at a yield of 3.209%. The proceeds of the securitization were used, in part, to repay the Deutsche Bank credit facility and return capital to the NCL partners.

Newtek-TSO II Conventional Credit Partners, LP (“Newtek-TSO JV”): On August 5, 2022, Newtek Commercial Lending, Inc., and TSO II Booster Aggregator, L.P. (“TSO II”) entered into a joint venture, Newtek-TSO JV, governed by the Amended and Restated Limited Partnership Agreement for the Newtek-TSO JV. Newtek Commercial Lending, Inc. and TSO II each committed to contribute an equal share of equity funding to the Newtek-TSO JV and each will have equal voting rights on all material matters. Newtek-TSO JV intends to deploy capital over the course of time with additional leverage supported by a warehouse line of credit. The intended purpose of Newtek-TSO JV will be to invest in non-conforming conventional commercial and industrial term loans made to middle-market companies as well as small businesses. It is anticipated that Newtek-TSO JV will begin making investments during the fourth quarter of 2022.

The following table shows NCL’s individual investments as of September 30, 2022:


Portfolio Company	Industry	Investment Type	Interest Rate		Maturity	Principal		Cost		Fair Value1
10 28th Ave SW Associates LLC	Fitness and Recreational Sport Centers	Term Loan	5 Yr Libor plus	5.50%	4/1/2045	$	2,192	$	2,148	$	2,038
10 28th Ave SW Associates LLC	Fitness and Recreational Sport Centers	Term Loan	5 Yr Libor plus	5.50%	4/1/2045	1,234		1,206		1,147
Cocoa Beach Office LLC	Other Activities Related to Credit Intermediation	Term Loan	2 Yr Libor plus	5.70%	8/1/2044	416		402		408
Foxhall Hospitality, LLC	Hotels (except Casino Hotels) and Motels	Term Loan	5 Yr Libor plus	6.00%	11/1/2044	10,202		9,999		9,781
Foxhall Hospitality, LLC	Hotels (except Casino Hotels) and Motels	Term Loan	5 Yr Libor plus	6.00%	11/1/2044	5,967		5,849		5,721
The Camera Division, LLC	Commercial & Industrial Machinery & Equipment	Term Loan	5 Yr Libor plus	7.25%	9/1/2029	10,475		10,177		10,305
The Emerald Green Group, LLC	Full-Service Restaurant	Term Loan	2 Yr Libor plus	5.65%	8/1/2029	3,515		3,359		3,251
XL Soccer World Orlando II LLC	Fitness and Recreational Sport Centers	Term Loan	Prime plus	3.25%	11/1/2045	4,882		4,733		4,664
XL Sports World NJ LLC and XL Soccer World Orlando LLC	Fitness and Recreational Sport Centers	Term Loan	5 Yr Libor plus	5.50%	8/1/2044	5,197		5,047		4,972
XL Sports World NJ LLC and XL Soccer World Orlando LLC	Fitness and Recreational Sport Centers	Term Loan	5 Yr Libor plus	5.50%	8/1/2044	4,630		4,514		4,393
Tricare Unlimited LLC and Geron Enterprises LLC	Nursing Care Facilities(Skilled Nursing Facilities)	Term Loan	2 Yr Treasury plus	6.51%	1/1/2045	5,549		5,397		5,479
E Entities LLC	Exterminating & Pest Control Services	Term Loan	5 Yr Treasury plus	7.71%	1/1/2030	4,871		4,748		4,874
Trinity MCC Realty, LLC	Motor Vehicle and Parts Dealers	Term Loan	5 Yr Treasury plus	6.58%	2/1/2045	4,497		4,357		4,327
Jaffe Real Estate LLC	Full-Service Restaurant	Term Loan	5 Yr Treasury plus	7.93%	4/1/2045	2,207		2,146		2,249
ARC Metal Stamping, LLC	Industrial Mold Manufacturing	Term Loan	5 Yr Treasury plus	7.43%	1/1/2045	5,336		5,336		5,324
McNeill Properties V, LLC	Fitness and Recreational Sport Centers	Term Loan	5 Yr Treasury plus	8.00%	9/1/2046	10,209		10,209		10,160
Total						$	81,379	$	79,627	$	79,093

(1) Fair value determined using significant unobservable inputs.

The following table shows NCL’s individual investments as of December 31, 2021:


Portfolio Company	Industry	Investment Type	Interest Rate		Maturity	Principal		Cost		Fair Value1
10 28th Ave SW Associates LLC	Fitness and Recreational Sport Centers	Term Loan	5 Yr Libor plus	5.50%	4/1/2045	$	2,225	$	2,181	$	2,117
10 28th Ave SW Associates LLC	Fitness and Recreational Sport Centers	Term Loan	5 Yr Libor plus	5.50%	4/1/2045	1,253		1,225		1,192
Cocoa Beach Office LLC	Other Activities Related to Credit Intermediation	Term Loan	2 Yr Libor plus	5.70%	8/1/2044	422		407		415
Foxhall Hospitality, LLC	Hotels (except Casino Hotels) and Motels	Term Loan	5 Yr Libor plus	6.00%	11/1/2044	10,321		10,115		10,447
Foxhall Hospitality, LLC	Hotels (except Casino Hotels) and Motels	Term Loan	5 Yr Libor plus	6.00%	11/1/2044	6,037		5,917		6,110
The Camera Division, LLC	Commercial & Industrial Machinery & Equipment	Term Loan	5 Yr Libor plus	7.25%	9/1/2029	11,050		10,734		11,203
The Emerald Green Group, LLC	Full-Service Restaurant	Term Loan	2 Yr Libor plus	5.65%	8/1/2029	5,510		5,344		5,173
XL Soccer World Orlando II LLC	Fitness and Recreational Sport Centers	Term Loan	Prime plus	3.25%	11/1/2045	4,986		4,836		4,907
XL Sports World NJ LLC and XL Soccer World Orlando LLC	Fitness and Recreational Sport Centers	Term Loan	5 Yr Libor plus	5.55%	8/1/2044	6,094		5,943		6,241
XL Sports World NJ LLC and XL Soccer World Orlando LLC	Fitness and Recreational Sport Centers	Term Loan	5 Yr Libor plus	5.55%	8/1/2044	4,686		4,570		4,738
Tricare Unlimited LLC and Geron Enterprises LLC	Nursing Care Facilities(Skilled Nursing Facilities)	Term Loan	2 Yr Treasury plus	6.51%	1/1/2045	5,617		5,463		5,838
E Entities LLC	Exterminating & Pest Control Services	Term Loan	5 Yr Treasury plus	7.71%	1/1/2030	5,244		5,113		5,526
Trinity MCC Realty, LLC	Motor Vehicle and Parts Dealers	Term Loan	5 Yr Treasury plus	6.58%	2/1/2045	5,092		4,950		5,260
Jaffe Real Estate LLC	Full-Service Restaurant	Term Loan	5 Yr Treasury plus	7.93%	4/1/2045	2,228		2,167		2,453
Berry Ventures Inc	Painting & Wall Covering Contractors	Term Loan	5 Yr Treasury plus	7.25%	4/1/2045	212		199		225
ARC Metal Stamping, LLC	Industrial Mold Manufacturing	Term Loan	5 Yr Treasury plus	7.43%	1/1/2045	5,383		5,383		5,809
McNeill Properties V, LLC	Fitness and Recreational Sport Centers	Term Loan	5 Yr Treasury plus	8.00%	9/1/2046	10,277		10,277		11,472
Total						$	86,637	$	84,824	$	89,126

(1) Fair value determined using significant unobservable inputs.

The following tables show certain summarized financial information for NCL:


Selected Statement of Assets and Liabilities Information	September 30, 2022		December 31, 2021
	(Unaudited)
Cash	$	3,194	$	1,845
Restricted cash	1,408		—
Investments in loans, at fair value (amortized cost of $79,627 and $84,824, respectively)	79,093		89,126
Other assets	1,866		595
Total assets	$	85,561	$	91,566

Bank notes payable	$	—	$	32,341
Securitization notes payable	51,916		—
Other liabilities	1,126		296
Total liabilities	53,042		32,637

Net assets	32,519		58,928
Total liabilities and net assets	$	85,561	$	91,565


Selected Statements of Operations Information	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021


Interest and other income	$	1,744	$	1,558	$	5,258	$	4,614
Total expenses	737		587		2,223		1,851
Net investment income	1,007		971		3,035		2,763
Unrealized depreciation on investments	(2,778)		(464)		(4,824)		(893)
Net (decrease) increase in net assets resulting from operations	$	(1,771)	$	507	$	(1,789)	$	1,870

TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2022

TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTY TRANSACTIONS

NOTE 4—TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTY TRANSACTIONS:

Transactions with Affiliated Companies

An affiliated company is an entity in which the Company has an ownership of 5% or more of its voting securities. A controlled affiliate is an entity in which the Company owns more than 25% of its voting securities. Transactions related to our investments with controlled and non-controlled affiliated companies for the nine months ended September 30, 2022 were as follows:


Portfolio Company	Fair Value at December 31, 2021		Purchases (Cost)		Principal Received		Net Realized Gains/(Losses)		Net Unrealized Gains/(Losses)		Fair Value at September 30, 2022		Interest and Other Income		Dividend Income
Controlled Investments
Newtek Merchant Solutions, LLC	$	114,500	$	—	$	—	$	—	$	(3,500)	$	111,000	$	—	$	11,950
Automated Merchant Services, LLC	—		—		—		—		53		53		—		720
Mobil Money, LLC	3,900		—		—		—		3,100		7,000		—		275
Newtek Technology Solutions, Inc.	47,225		400		(225)		—		(6,400)		41,000		837		1,500
banc-serv Partners, LLC	—		—		—		—		—		—		—		—
CDS Business Services, Inc.	7,300		1,900		(1,900)		—		(962)		6,338		835		—
Small Business Lending, LLC	4,400		3,565		—		—		(1,265)		6,700		165		—
Newtek Insurance Agency, LLC	2,300		—		—		—		2,700		5,000		—		—
PMTWorks Payroll, LLC	2,000		3,225		(2,685)		—		960		3,500		328		—
Titanium Asset Management LLC	603		822		(900)		—		(320)		205		426		—
POS on Cloud, LLC	1,300		326		—		—		—		1,626		99		—
Excel WebSolutions, LLC	—		230		(159)		—		(71)		—		69		—
Newtek Conventional Lending, LLC	29,464		250		(9,741)		—		(3,713)		16,260		—		2,019
Newtek Business Lending, LLC	47,406		15,840		—		—		11,000		74,246		—		3,525
Total Controlled Investments	$	260,398	$	26,558	$	(15,610)	$	—	$	1,582	$	272,928	$	2,759	$	19,989

Non-Control Investments
EMCAP Loan Holdings, LLC	$	1,000	$	—	$	—	$	—	$	—	$	1,000	$	—	$	62
Biller Genie Software, LLC	—		360		—		—		—		360		—		—
Total Non-Control Investments	$	1,000	$	360	$	—	$	—	$	—	$	1,360	$	—	$	62

Total Affiliate Investments	$	261,398	$	26,918	$	(15,610)	$	—	$	1,582	$	274,288	$	2,759	$	20,051

Related Party Transactions

Notes Payable - Related Parties

In June 2015, the Company entered into the Related Party RLOC with certain controlled portfolio companies. Maximum borrowings under the Related Party RLOC are $50.0 million. The outstanding balance has an interest rate equal to the lesser of 1 month LIBOR plus 2.5% or the Prime Rate plus 1.5%. At September 30, 2022, the Related Party RLOC interest rate was 4.78%. The Related Party RLOC has a maturity date of November 8, 2023. There was $0.2 million in outstanding borrowings from NMS at September 30, 2022 under the Related Party RLOC.

For the three months ended September 30, 2022 and 2021, interest expense was $0.1 million and $0.1 million respectively. For the nine months ended September 30, 2022 and 2021, interest expense was $0.3 million and $0.3 million, respectively.

Expenses Incurred from Controlled Portfolio Companies

The Company incurs expenses from certain controlled portfolio companies including managed technology services from NTS, origination and loan processing fees from various related parties and payroll processing fees from PMT.


	Three Months Ended				Nine Months Ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Managed technology services	$	65	$	532	$	1,107	$	1,475
Origination and loan processing	3,884		3,187		10,140		10,856
Loan servicing	—		14		—		41

Payroll processing fees	10		8		26		25
Total	$	3,959	$	3,741	$	11,273	$	12,397

The Company also sub-leases portions of its office space in Lake Success, New York to certain portfolio companies. Amounts charged were as follows:


	Three Months Ended				Nine Months Ended
Portfolio Company	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Newtek Merchant Solutions, LLC	$	69	$	63	$	220	$	187
Newtek Technology Solutions, Inc.	2		2		8		8
Small Business Lending, LLC	97		80		286		230
Newtek Insurance Agency, LLC	11		17		42		52
CDS Business Services, Inc.	17		18		54		56
PMTWorks Payroll, LLC	2		3		6		14
Newtek Business Lending, LLC	2		2		6		5
Total	$	200	$	185	$	622	$	552

Amounts due from related parties were $0.9 million and $4.4 million at September 30, 2022 and December 31, 2021, respectively. Amounts due to related parties were $1.8 million and $1.5 million at September 30, 2022 and December 31, 2021, respectively.

Managerial Assistance Fees from Controlled Investments

The Company offers managerial assistance to all portfolio companies and currently provides managerial assistance to certain controlled portfolio companies. Fees are recorded on a quarterly basis, are recurring in nature, and are charged consistently based on estimates of time and effort spent by certain employees providing managerial services. The table below summarizes amounts charged to each controlled portfolio company, and are recorded as a credit to salaries and benefits in the consolidated statements of operations.


	Three Months Ended				Nine Months Ended
Portfolio Company	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Newtek Merchant Solutions, LLC	$	121	$	106	$	358	$	338
Newtek Technology Solutions, Inc. (NTS)	103		107		309		358
PMTWorks Payroll, LLC	31		23		80		65
Newtek Insurance Agency, LLC	48		32		118		95
Newtek Conventional Lending, LLC	3		5		12		5
POS on Cloud, LLC	4		—		4		—
CDS Business Services, Inc.	81		64		228		148
Mobil Money, LLC	23		28		66		86
Newtek Business Lending, LLC	56		43		161		119
Small Business Lending, LLC	142		130		422		382
Total	$	612	$	538	$	1,758	$	1,596

SERVICING ASSETS

9 Months Ended

Sep. 30, 2022

Transfers and Servicing [Abstract]

SERVICING ASSETS

NOTE 5—SERVICING ASSETS:

Servicing assets are measured at fair value. The Company earns servicing fees from the guaranteed portions of SBA 7(a) loans it originates and sells.

The following tables summarizes the fair value and valuation assumptions related to servicing assets at September 30, 2022 and December 31, 2021:


	Servicing Assets			Weighted		Range
Date	Fair Value		Unobservable Input	Average		Minimum		Maximum
September 30, 2022	$	33,530	Discount factor1	12.60	%	12.60	%	12.60	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%

December 31, 2021	$	28,008	Discount factor1	12.60	%	12.60	%	12.60	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%

(1) Determined based on risk spreads and observable secondary market transactions.

Servicing fee income earned for the three months ended September 30, 2022 and 2021 was $3.6 million and $2.8 million, respectively. Servicing fee income earned for the nine months ended September 30, 2022 and 2021 was $9.9 million and $8.3 million, respectively.

The entire disclosure for a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows.

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FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 6—FAIR VALUE MEASUREMENTS:

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. In determining fair value, management uses various valuation approaches, all of which have been approved by the Company’s Board. In accordance with GAAP, a fair value hierarchy for inputs is used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.

The fair value hierarchy gives the highest priority (Level 1) to quoted prices in active markets for identical assets or liabilities and gives the lowest priority to unobservable inputs (Level 3). The levels of the fair value hierarchy are as follows:

Level 1Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an active exchange market, as well as certain U.S. Treasury, other U.S. Government and agency mortgage-backed debt securities that are highly liquid and are actively traded in over-the-counter markets.

Level 2Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes certain U.S. Government and agency mortgage-backed debt securities, corporate debt securities, derivative contracts and residential mortgage loans held-for-sale.

Level 3Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain private equity investments, retained residual interests in securitizations, residential mortgage servicing rights, and highly structured or long-term derivative contracts.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset or a liability’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The Company assesses the levels of assets and liabilities at each measurement date. There were no transfers to or from Level 3 of the fair value hierarchy for assets and liabilities during the nine months ended September 30, 2022 or 2021.

Level 1 investments are valued using quoted market prices. Level 2 investments are valued using market consensus prices that are corroborated by observable market data and quoted market prices for similar assets and liabilities.

For certain investments, the Company generally calculates the fair value of the investment primarily based on the net asset NAV of the entity and adjusts the fair value for other factors that would affect the fair value of the investment. The Company uses this valuation approach for its investment in NCL.

Due to the inherent uncertainty of determining the fair value of Level 3 investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that may ultimately be received or settled. Further, such investments are generally subject to legal and other restrictions or otherwise are less liquid than publicly traded instruments. If the Company were required to liquidate a portfolio investment in a forced or liquidation sale, the Company may realize significantly less than the value at which such investment had previously been recorded.

The Company’s investments are subject to market risk. Market risk is the potential for changes in the value due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the investments are traded. In addition, the ongoing COVID-19 pandemic, recent changes in inflation and base interest rates, supply chain disruptions, significant market volatility, risk of recession, the ongoing war between Russia and Ukraine and general uncertainty surrounding the financial and political stability of the United States, United Kingdom, the European Union and China could further negatively impact the fair value of the Company’s investments after September 30, 2022, in addition to other circumstances and events that are not yet known.

In December 2020, Rule 2a-5 under the 1940 Act was adopted by the SEC and establishes requirements for determining fair value in good faith for purposes of the 1940 Act. The Company complied with all applicable components of Rule 2a-5 by the compliance date in September 2022.

The following tables present fair value measurements of the Company’s assets and liabilities measured at fair value and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair values as of September 30, 2022 and December 31, 2021:


	Fair Value Measurements at September 30, 2022
	Total		Level 1		Level 2		Level 3
Assets:

SBA unguaranteed non-affiliate investments	$	488,376	$	—	$	—	$	488,376
SBA guaranteed non-affiliate investments	22,949		—		22,949		—
Controlled investments	272,928		—		—		256,668
Other real estate owned1	2,315		—		—		2,315
Non-control investments	1,360		—		—		1,360
Servicing assets	33,530		—		—		33,530

Controlled investments measured at NAV2	16,260		—		—		—
Total assets	$	837,718	$	—	$	22,949	$	782,249

(1) Included in Other Assets on the Consolidated Statements of Assets and Liabilities.

(2) The Company’s investment in NCL is measured at fair value using NAV and has not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities.

The change in unrealized appreciation (depreciation) included in the consolidated statements of operations attributable to Level 3 investments held at September 30, 2022 includes $6.5 million in unrealized depreciation on SBA unguaranteed non-affiliate investments, $5.3 million in unrealized appreciation on controlled investments and $4.0 million in unrealized depreciation on servicing assets.


	Fair Value Measurements at December 31, 2021
	Total		Level 1		Level 2		Level 3
Assets:

SBA unguaranteed non-affiliate investments	$	424,417	$	—	$	—	$	424,417
SBA guaranteed non-affiliate investments	72,970		—		72,970		—
Controlled investments	230,934		—		—		230,934
Other real estate owned1	2,354		—		—		2,354
Non-control investments	1,000		—		—		1,000
Servicing assets	28,008		—		—		28,008
Controlled investments measured at NAV2	29,464		—		—		—
Total assets	$	789,147	$	—	$	72,970	$	686,713
Liabilities:
Derivative instruments3	$	183	$	—	$	183	$	—

(1) Included in Other Assets on the Consolidated Statements of Assets and Liabilities.

(3) Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.

The following tables represents the changes in investments, servicing assets and liabilities measured at fair value using Level 3 inputs for the nine months ended September 30, 2022 and 2021:


	Nine Months Ended September 30, 2022
	SBA Unguaranteed Investments		Controlled Investments		Servicing Assets		Non-Control Investments		Other Real Estate Owned1
Fair value, December 31, 2021	$	424,417	$	230,935	$	28,008	$	1,000	$	2,354
Net change in unrealized appreciation (depreciation) on investments	(6,473)		5,295		—		—		(172)

Change in net unrealized depreciation on servicing assets due to factors other than changes in valuation inputs or assumptions	—		—		(3,964)		—		—
Realized loss	(8,131)		—		—		—		(205)
SBA unguaranteed non-affiliate investments, funded	142,974		—		—		—		—
Foreclosed real estate acquired	(1,646)		—		—		—		1,646
Purchase of investments	—		26,308		—		360		—

Sale of investment	—		—		—		—		(1,308)






Principal payments received on debt investments	(63,365)		(5,870)		—		—		—
Additions to servicing assets	—		—		9,486		—		—
Fair value, September 30, 2022	$	488,377	$	256,668	$	33,530	$	1,360	$	2,315

(1) Included in Other Assets on the Consolidated Statements of Assets and Liabilities.


	Nine Months Ended September 30, 2021
	SBA Unguaranteed Investments		Controlled Investments		Servicing Assets		Non-Control Investments		Other Real Estate Owned1
Fair value, December 31, 2020	$	407,748	$	219,143	$	26,061	$	6,447	$	2,717
Net change in unrealized appreciation (depreciation) on investments	2,583		1,233		—		521		(73)
Change in net unrealized appreciation on servicing assets due to changes in valuation inputs or assumptions	—		—		(2,440)		—		—
Change in net unrealized depreciation on servicing assets due to factors other than changes in valuation inputs or adjustments	—		—		(882)		—		—
Realized loss	(7,297)		—		—		—		(279)
SBA unguaranteed non-affiliate investments, funded	48,473		—		—		—		—
Foreclosed real estate acquired	(1,654)		—		—		—		1,654
Purchase of investments	—		36,940		—		—		—
Purchase of loans from SBA	6,945		—		—		—		—
Sale of investment	—		—		—		—		(1,281)





Return of investment	—		(15,000)		—		—		—
Principal payments received on debt investments	(50,217)		—		—		(47)		—
Additions to servicing assets	—		—		6,160		—		—
Fair value, September 30, 2021	$	406,581	$	242,316	$	28,899	$	6,921	$	2,738

(1) Included in Other Assets on the Consolidated Statements of Assets and Liabilities.

The following tables provide a summary of quantitative information about the Company’s Level 3 fair value measurements as of September 30, 2022 and December 31, 2021. In addition to the inputs noted in the table below, according to our valuation policy we may also use other valuation techniques and methodologies when determining our fair value measurements. The tables below are not intended to be all-inclusive, but rather provide information on the significant Level 3 inputs as they relate to the Company’s fair value measurements at September 30, 2022 and December 31, 2021.


	Fair Value as of			Weighted		Range
	September 30, 2022		Unobservable Input	Average1		Minimum		Maximum
Assets:
SBA unguaranteed non-affiliate investments - accrual loans	$	457,261	Market yields	7.60	%	7.60	%	7.60	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%
SBA unguaranteed non-affiliate investments - non-accrual loans	$	31,115	Market yields	9.50	%	9.50	%	9.50	%

			Average cumulative default rate	30.00	%	30.00	%	30.00	%
Controlled equity investments1	$	237,630	EBITDA multiples-TTM2	7.4x		6.50x		8.00x
			EBITDA multiples-NTM2	6.9x		5.75x		7.50x
			Revenue multiples2	2.37x		0.80x		3.10x
			Book value multiples2	1.00x		0.80x		1.20x
			Earnings-NTM2	6.50x		6.00x		7.00x
			Weighted average cost of capital2	12.83	%	11.60	%	19.40	%

Controlled debt investments	$	19,038	Market yields	8.52	%	5.50	%	10.00	%

Non-control equity investments	$	1,000	Market yields	10.00	%	8.00	%	12.00	%
	$	360	Cost basis	N/A		N/A		N/A



Servicing assets	$	33,530	Market yields	12.60	%	12.60	%	12.60	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%
Other real estate owned	$	2,315	Appraised value	N/A		N/A		N/A

(1) Weighted by relative fair value.

(2) The Company valued $149.5 million of investments using a combination of EBITDA, both trailing twelve months (“TTM”) and next twelve months (“NTM”), revenue, book value, and earnings multiples in the overall valuation approach, which included the use of market comparable companies. The Company valued $87.9 million of investments using only discounted cash flows.


	Fair Value as of			Weighted		Range
	December 31, 2021		Unobservable Input	Average1		Minimum		Maximum
Assets:
SBA unguaranteed non-affiliate investments - accrual loans	$	393,910	Market yields	4.50	%	4.50	%	4.50	%
			Cumulative prepayment rate	22.00	%	22.00	%	22.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%
SBA unguaranteed non-affiliate investments - non-accrual loans	$	30,507	Market yields	4.85	%	4.85	%	4.85	%

			Average cumulative default rate	30.00	%	30.00	%	30.00	%
Controlled equity investments1	$	208,106	EBITDA multiples-TTM2	8.30x		7.50x		9.00x
			EBITDA multiples-NTM2	7.50x		6.30x		8.25x
			Revenue multiples2	2.67x		1.10x		3.50x
			Weighted average cost of capital2	12.34	%	11.00	%	18.50	%
Controlled debt investments	$	22,828	Market yields	8.52	%	3.80	%	12.00	%
Non-control equity investments	$	1,000	Market yields	9.50	%	8.00	%	12.00	%

Servicing assets	$	28,008	Market yields	12.60	%	12.60	%	12.60	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%
Other real estate owned	$	2,354	Appraised value	N/A		N/A		N/A

(1) Weighted by relative fair value.

(2) The Company valued $152.8 million of investments using a combination of EBITDA, both training twelve months (“TTM”) and next twelve months (“NTM”), and revenue multiples in the overall valuation approach, which included the use of market comparable companies. The Company valued $55.3 million of investments using only discounted cash flows.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

BORROWINGS

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

BORROWINGS

NOTE 7—BORROWINGS:

At September 30, 2022 and December 31, 2021, the Company had borrowings comprised of the following:


	September 30, 2022						December 31, 2021
	Commitments		Borrowings Outstanding		Weighted Average Interest Rate		Commitments		Borrowings Outstanding		Weighted Average Interest Rate
Capital One line of credit - guaranteed1	$	150,000	$	67,500	5.50	%	$	150,000	$	50,000	2.50	%
Capital One line of credit - unguaranteed1	—		—		5.00	%	—		—		3.50	%

2024 Notes	38,250		37,847		5.75	%	38,250		37,679		5.75	%
2025 6.85% Notes2	—		—		—		15,000		14,545		6.85	%
2025 5.00% Notes2	30,000		29,246		5.00	%	—		—		—
2026 Notes	115,000		112,666		5.50	%	115,000		112,128		5.50	%
Notes payable - related parties	50,000		150		4.78	%	50,000		11,450		2.60	%
Notes payable - Securitization Trusts	302,253		298,125		4.61	%	249,750		246,250		2.05	%
Total	$	685,503	$	545,534	5.00	%	$	618,000	$	472,052	3.38	%

(1) Total combined commitments of the guaranteed and unguaranteed lines of credit were $150.0 million at September 30, 2022 and December 31, 2021.

(2) On March 31, 2022, the Company completed a private placement in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended of $15.0 million aggregate principal amount of its 2025 5.00% Notes to a single purchaser and caused notices to be issued to the holder of its 2025 6.85% Notes regarding the Company’s exercise of its option to redeem all $15.0 million in aggregate principal amount of the 2025 6.85% Notes on May 2, 2022. The Company also issued an addition $15.0 million in aggregate principal amount of 2025 5.00% Notes to the purchaser on May 2, 2022.

On July 26, 2018, our shareholders approved the application of the modified asset coverage requirement as set forth in Section 61(a)(2) of the 1940 Act. As a result, our minimum required asset coverage ratio decreased from 200% to 150%, effective July 27, 2018. As of September 30, 2022, our asset coverage was 171%.

Outstanding borrowings under the 2024 Notes, 2025 Notes, 2026 Notes, and Notes payable - Securitization Trusts consisted of the following:


	September 30, 2022								December 31, 2021
	2024 Notes		2025 5.00% Notes		2026 Notes		Notes Payable- Securitization Trusts		2024 Notes		2025 6.85% Notes		2026 Notes		Notes Payable- Securitization Trusts
Principal balance	$	38,250	$	30,000	$	115,000	$	302,253	$	38,250	$	15,000	$	115,000	$	249,750
Unamortized deferred financing costs	(403)		(754)		(2,334)		(4,128)		(571)		(455)		(2,872)		(3,500)
Net carrying amount	$	37,847	$	29,246	$	112,666	$	298,125	$	37,679	$	14,545	$	112,128	$	246,250

At September 30, 2022 and December 31, 2021, the carrying amount of the Company’s borrowings under the Capital One lines of credit, Notes payable - related parties and Notes payable - Securitization Trusts, approximates fair value due to their variable interest rates.

The fair values of the fixed rate 2026 Notes and 2024 Notes are based on the closing public share price on the date of measurement. On September 30, 2022, the closing price of the 2026 Notes was $24.22 per note, or $111.4 million. On December 31, 2021, the closing price of the 2026 Notes was $25.77 per note, or $118.5 million. On September 30, 2022, the closing price of the 2024 Notes was $24.81 per note, or $38.0 million. On December 31, 2021, the closing price of the 2024 Notes was $25.40 per note, or $38.9 million. These borrowings are not recorded at fair value on a recurring basis. The fixed rate 2025 Notes are held at par as of September 30, 2022 and December 31, 2021.

Total interest expense including unused line fees and amortization of deferred financing costs related to borrowings for the nine months ended September 30, 2022 and 2021 was $17.4 million and $15.2 million, respectively.

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS

9 Months Ended

Sep. 30, 2022

DERIVATIVE INSTRUMENTS

NOTE 8—DERIVATIVE INSTRUMENTS:

The Company historically used derivative instruments primarily to economically manage the fair value variability of certain fixed rate assets caused by interest rate fluctuations and overall portfolio market risk. The following is a breakdown of the derivatives outstanding as of September 30, 2022 and December 31, 2021:


	September 30, 2022							December 31, 2021
			Fair Value				Remaining			Fair Value			Remaining
Contract Type	Notional		Asset1		Liability1		Maturity (years)	Notional		Asset1	Liability1		Maturity (years)
5-year Swap Futures	$	—	$	—	$	—	—	$	43,247	—	$	183	0.25

(1) Shown as derivative instruments, at fair value, in the accompanying consolidated balance sheets.

The following table indicated the net realized gains (losses) and unrealized appreciation (depreciation) on derivatives as included in the consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021:


	Three Months Ended								Nine Months Ended
	September 30, 2022				September 30, 2021				September 30, 2022				September 30, 2021
Contract Type	Unrealized Appreciation/(Depreciation)		Realized Gain/(Loss)		Unrealized Appreciation/(Depreciation)		Realized Gain/(Loss)		Unrealized Appreciation/(Depreciation)		Realized Gain/(Loss)		Unrealized Appreciation/(Depreciation)		Realized Gain/(Loss)
5-year Swap Futures	$	—	$	—	$	341	$	(268)	$	183	$	445	$	304	$	(268)

Collateral posted with our futures counterparty is segregated in the Company’s books and records. Historically, the Company’s counterparty held cash margin as collateral for derivatives, which is included in restricted cash in the consolidated balance sheets. Interest rate futures are centrally cleared by the Chicago Mercantile Exchange (“CME”) through a futures commission merchant. The Company is required to post initial margin and daily variation margin for interest rate futures that are centrally cleared by CME. CME determines the fair value of our centrally cleared futures, including daily variation margin. Variation margin pledged on the Company’s centrally cleared interest rate futures is settled against the realized results of these futures.

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 9—COMMITMENTS AND CONTINGENCIES:

Operating and Employment Commitments

The Company leases office space and other office equipment in several states under operating lease agreements which expire at various dates through 2027. Those office space leases which are for more than one year generally contain scheduled rent increases or escalation clauses.

The following summarizes the Company’s obligations and commitments, as of September 30, 2022 for future minimum cash payments required under operating lease and employment agreements:


Year	Operating Leases		Employment Agreements1		Total
2022	$	472	$	706	$	1,178
2023	1,928		417		2,345
2024	1,981		—		1,981
2025	2,035		—		2,035
2026	1,915		—		1,915
Thereafter	469		—		469
Total	$	8,800	$	1,123	$	9,923

(1) Employment agreements with certain of the Company’s named executive officers

Legal Matters

In the ordinary course of business, the Company and its wholly-owned portfolio companies may from time to time be party to lawsuits and claims. The Company evaluates such matters on a case by case basis and its policy is to contest vigorously any claims it believes are without compelling merit.

For example, the Company closed on its $5.4 million investment in BSP in June 2016. Subsequently, as previously disclosed, the Company invested $1.7 million in additional capital and recorded $7.1 million in unrealized losses on the BSP investment to write down the fair value of the investment to $0.0 million by June 30, 2019. The BSP investment resulted in protracted litigation with Kerri Agee, the former owner and President of BSP, who filed for bankruptcy and was indicted in 2019 for, and convicted in 2021 of, defrauding the SBA. The Agee litigation concluded with Holdco 5 obtaining a nondischargeable judgment against Agee in the amount of $6.2 million in January 2022. Holdco 5 intends to vigorously pursue all of its rights relating to this matter, though there can be no assurances of the possibility of recovering some or substantially all of the assets referred to in the judgement. Holdco 5 has not recorded any gain contingency relating to this litigation.

As a result of a litigation brought by the Federal Trade Commission (the “FTC”) in October 2012, NMS voluntarily entered into, and is presently operating under, a permanent injunction with respect to certain of its business practices.

Guarantees

The Company is a guarantor on the Receivable and Inventory Facility at NBC. Maximum borrowings under the Receivable and Inventory Facility are $12.0 million and will be reduced until the facility matures in May 2023. At September 30, 2022, total principal owed by NBC was $10.3 million. In addition, the Company deposited $0.75 million to collateralize the guarantee. At September 30, 2022, the Company determined that it is not probable that payments would be required to be made under the guarantee.

The Company is a guarantor on the NBL Capital One Facility. Maximum borrowings under the NBL Facility are $75.0 million with an accordion feature to increase maximum borrowings to $150.0 million. The lender’s commitments terminate in November 2022, with all amounts due under the NBL Facility maturing in November 2023. At September 30, 2022, total principal owed by NBL was $23.0 million. At September 30, 2022, the Company determined that it is not probable that payments would be required to be made under the guarantee.

The Company is a guarantor on the NBL Deutsche Bank Facility. Maximum borrowings under the NBL Deutsche Bank Facility are $100.0 million. The Deutsche Bank Facility matures in March 2023. At September 30, 2022, total principal owed by NBL was $0.0 million. At September 30, 2022, the Company determined that it is not probable that payments would be required to be made under the guarantee.

The Company is a guarantor on the NBL One Florida Bank Facility. Maximum borrowings under the NBL One Florida Bank Facility are $20.0 million. The Deutsche Bank Facility matures in September 2024. At September 30, 2022, total principal owed by NBL was $14.1 million. At September 30, 2022, the Company determined that it is not probable that payments would be required to be made under the guarantee.

The Company is a guarantor on the Webster Facility, a term loan facility between NMS with Webster Bank with an aggregate principal amount up to $50.0 million. The Webster Facility matures in November 2023. At September 30, 2022, total principal outstanding was $21.9 million. At September 30, 2022, the Company determined that it is not probable that payments would be required to be made under the guarantee.

Unfunded Commitments

At September 30, 2022, the Company had $15.3 million of unfunded commitments in connection with its SBA 7(a) non-affiliate investments related to portions of loans originated which are partially funded. The Company will fund these commitments from the same sources it uses to fund its other investment commitments.

FINANCIAL HIGHLIGHTS

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

FINANCIAL HIGHLIGHTS

NOTE 10—FINANCIAL HIGHLIGHTS:

The financial highlights for the Company are as follows:



	Nine Months Ended September 30,
	2022			2021
Per share data¹
Net asset value at beginning of period	$	16.72		$	15.45
Net investment (loss) income	(0.04)			1.07
Net realized gain on investments	2.06			1.69
Net realized gain (loss) on derivative transactions	0.02			(0.01)
Net unrealized appreciation (depreciation) on investments	(0.45)			0.33
Net unrealized depreciation on servicing assets	(0.16)			(0.15)
Net unrealized appreciation on derivative transactions	0.01			0.01
Change in deferred taxes	(0.01)			(0.09)
Net increase in net assets resulting from operations	1.43			2.85
Distributions to common stockholders	(2.05)			(2.10)
Stock-based compensation expense	0.06			0.07
Accretive effect of stock offerings (issuing shares above NAV per share)	0.01			0.09



Accretive effect of shares issued in connection with DRIP (issuing shares above NAV per share)	—			0.01
Dilutive effect of purchase of vested stock for employee payroll tax withholding (purchase of shares above NAV)	(0.01)			(0.03)
Dilutive effect of restricted stock awards	(0.14)			(0.14)
Other⁴	0.02			0.03
Net asset value at end of period	$	16.04		$	16.23

Per share market value at end of period	$	16.32		$	27.73
Total return based on market value² ⁷	(33.12)		%	52.06		%
Total return based on change in NAV³ ⁷	8.19		%	18.64		%
Shares outstanding at end of period (in thousands)	24,425			22,559

Ratios/Supplemental Data:
Net assets at end of period	$	391,799		$	366,020
Ratio of expenses to average net assets⁸	21.53		%	21.98		%
Ratio of net investment (loss) income to average net assets⁸	(0.33)		%	8.99		%
Portfolio turnover6	71.18		%	152.77		%
Average debt outstanding	$	504,226		$	470,289
Average debt outstanding per share	$	20.64		$	20.85
Asset coverage ratio⁵	171		%	173		%
Senior securities outstanding	$	553,153		$	500,839

(1) Based on actual number of shares outstanding at the end of the corresponding period or the weighted average shares outstanding for the period, unless otherwise noted, as appropriate.

(2) Total return based on market value is calculated based on the purchase of stock at the current market price on the first day and a sale at the current market price on the last day of each period reported and assumes reinvestment of dividends at prices obtained by the Company's DRIP plan during the period. The return does not reflect any sales load that may be paid by an investor.

(3) Total return based on change in NAV is calculated using the change in net asset value plus dividends to stockholders during the period, divided by the beginning net asset value.

(4) Includes the impact of the different share amounts as a result of calculating certain per share data based on weighted average shares outstanding during the period and certain per share data based on shares outstanding as of a period end or transaction date.

(5) Calculated based on the amount of senior securities outstanding at period end.

(6) Portfolio turnover is calculated by dividing (a) the lesser of purchases or sales of portfolio securities by (b) the average total investments at fair value. The calculation includes PPP loan activity in 2021.

(7) Not annualized.

(8) Annualized for the nine months ended September 30, 2022. Loss on extinguishment of debt has not been annualized.

STOCK BASED COMPENSATION

9 Months Ended

Sep. 30, 2022

STOCK BASED COMPENSATION

NOTE 11—STOCK BASED COMPENSATION:

Stock Plan

The Company accounts for its stock-based compensation plan using the fair value method, as prescribed by ASC 718, Compensation—Stock Compensation. Accordingly, for restricted stock awards, the Company measured the grant date fair value based upon the market price of its common stock on the date of the grant and amortizes the fair value of the awards as stock-based compensation expense over the requisite service period, which is generally the vesting term.

The Board approves the issuance of shares of restricted stock to employees and directors pursuant to the Equity Incentive Plan. These shares generally vest over a one to three year period from the grant date. The fair value is expensed over the service period, starting on the grant date. The following table summarizes the restricted stock issuances under the Equity Incentive Plan, net of shares forfeited, if any, and the remaining shares of restricted stock available for issuance as of September 30, 2022.


Restricted Stock authorized under the plan1						1,500,000
Less net restricted stock (granted)/forfeited during:
Year ended December 31, 2016						(120,933)
Year ended December 31, 2017						(5,007)
Year ended December 31, 2018						(93,568)
Year ended December 31, 2019						(6,285)
Year ended December 31, 2020						2,639
Year ended December 31, 2021						(214,654)
Nine months ended September 30, 2022						(187,914)
Restricted stock available for issuance as of September 30, 2022						874,278

(1) A maximum of 20% of total shares of common stock issued and outstanding, calculated on a fully diluted basis, not to exceed 3.0 million shares, are available for awards of restricted stock and stock options under the Equity Incentive Plan. No more than 50% of the shares of stock reserved for the grant of awards under the Equity Incentive Plan may be restricted stock awards at any time during the term of the Equity Incentive Plan. No stock options have been granted under the Equity Incentive Plan.

As of September 30, 2022, there was $5.5 million of total unrecognized compensation expense related to unvested restricted shares. This compensation expense is expected to be recognized over a remaining weighted-average period of approximately 2.2 years as of September 30, 2022.

For the three months ended September 30, 2022 and 2021 the Company recognized total stock-based compensation expense of $0.6 million and $0.3 million, respectively. For the nine months ended September 30, 2022 and 2021 the Company recognized total stock-based compensation expense of $1.8 million and $1.5 million, respectively.

COMMON STOCK

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

COMMON STOCK

NOTE 12—COMMON STOCK:

ATM Program

On June 25, 2020, the Company entered into the 2020 ATM Equity Distribution Agreement. On July 20, 2022, the Company entered into Amendment No. 1 to the 2020 ATM Equity Distribution Agreement. The 2020 ATM Equity Distribution Agreement, as amended, provides that the Company may offer and sell up to 6,400,000 shares of common stock from time to time through the placement agents. As of November 7, 2022, there were 3,401,661 shares of common stock available for sale under the 2020 ATM Equity Distribution Agreement, as amended.

The following table summarizes the total shares sold and net proceeds received under the 2020 ATM Equity Distribution Agreement:


	Nine Months Ended September 30, 2022		Year Ended December 31, 2021
Shares sold	36		1,940
Net weighted average price per share	$	21.11	$	25.91
Net proceeds	$	760	$	50,261

The Company used the net proceeds for funding investments in debt and equity securities in accordance with its investment objective and strategies.

Stock Repurchase Program

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

EARNINGS PER SHARE

NOTE 13—EARNINGS PER SHARE:

The following table summarizes the calculations for the net increase in net assets resulting from operations per common share for the three and nine months ended September 30, 2022 and 2021:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net increase in net assets resulting from operations	$	11,362	$	16,614	$	34,533	$	64,112
Weighted average shares outstanding	24,299		22,541		24,204		22,468
Net increase in net assets resulting from operations per share	$	0.47	$	0.74	$	1.43	$	2.85

LEASES

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

LEASES

NOTE 14—LEASES:

Under ASC 842, operating lease expense is generally recognized on a straight-line basis over the term of the lease. The Company has entered into operating lease agreements for office space with remaining contractual terms up to five years, some of which include renewal options that extend the leases for up to 10 years. These renewal options are not considered in the remaining lease term unless it is reasonably certain the Company will exercise such options. The operating lease agreements do not contain any material residual value guarantees or material restrictive covenants.

As the rate implicit in the leases generally is not readily determinable for our operating leases, the discount rates used to determine the present value of our lease liability are based on our incremental borrowing rate at the lease commencement date and commensurate with the remaining lease term. Our incremental borrowing rate for a lease is the rate of interest we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Leases with an initial term of 12 months or less are not recorded on the balance sheet and are excluded from our weighted-average remaining lease term.

The following table summarizes supplemental cash flow and other information related to our operating leases:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)	$	471		$	385		$	1,404		$	1,169
Weighted-average remaining lease term - operating leases	4.41 years			5.6 years			4.41 years			5.6 years
Weighted-average discount rate - operating leases	4.55		%	4.55		%	4.55		%	4.55		%
Total lease costs (included in other general and administrative costs on the consolidated statements of operations)	$	253		236			$	729		$	676

The following table represents the maturity of the Company’s operating lease liabilities as of September 30, 2022:


Maturity of Lease Liabilities
2022	472
2023	1,928
2024	1,981
2025	2,035
2026	1,915
Thereafter	469
Total future minimum lease payments	$	8,800
Less: Imputed interest	$	(855)
Present value of future minimum lease payments	$	7,945

DIVIDENDS AND DISTRIBUTIONS

9 Months Ended

Sep. 30, 2022

DIVIDENDS AND DISTRIBUTIONS

NOTE 15—DIVIDENDS AND DISTRIBUTIONS:

The Company’s dividends and distributions are recorded on the declaration date. The following table summarizes the Company’s dividend declarations and distributions during the nine months ended September 30, 2022 and 2021.


Date Declared	Record Date	Payment Date	Amount Per Share		Cash Distribution		DRIP Shares Issued	DRIP Shares Value
Nine months ended September 30, 2022
December 20, 2021	March 21, 2022	March 31, 2022	$	0.65	$	15,361	9	$	225
April 20, 2022	June 20, 2022	June 30, 2022	$	0.75	$	17,634	21	$	374
August 30, 2022	September 20, 2022	September 30, 2022	$	0.65	$	15,325	21	$	323


Nine months ended September 30, 2021
February 23, 2021	March 22, 2021	March 31, 2021	$	0.50	$	11,025	6	$	140
May 11, 2021	June 15, 2021	June 30, 2021	$	0.70	$	15,433	6	$	213
August 10, 2021	September 20, 2021	September 30, 2021	$	0.90	$	19,895	10	$	264

During the nine months ended September 30, 2022 and 2021, an additional 21,700 and 7,600 shares valued at $0.4 million and $0.2 million, respectively, were issued related to dividends on unvested restricted stock awards.

SUPPLEMENTAL FINANCIAL DATA

9 Months Ended

Sep. 30, 2022

SUPPLEMENTAL FINANCIAL DATA

NOTE 16—SUPPLEMENTAL FINANCIAL DATA:

Summarized Financial Information of Our Unconsolidated Subsidiaries

The Company holds a controlling interest as defined by the 1940 Act in portfolio companies that are not consolidated in the Company’s condensed consolidated financial statements. Below is a brief description of a portfolio companies that are required to have supplemental disclosure incorporated in our financial statements in accordance with Regulation S-X section 4-08(g), along with summarized financial information.

Newtek Merchant Solutions, LLC

NMS markets and sells credit and debit card processing services, check approval services and ancillary processing equipment and software to merchants who accept credit cards, debit cards, checks and other non-cash forms of payment.

The summarized financial information of our unconsolidated subsidiary is as follows:


Balance Sheets - Newtek Merchant Solutions, LLC	As of September 30, 2022		As of December 31, 2021
Current assets	$	13,894	$	9,965
Noncurrent assets	20,076		27,200
Total assets	$	33,970	$	37,165
Current liabilities	9,721		8,953
Noncurrent liabilities	16,625		20,291
Total liabilities	$	26,346	$	29,244
Total member’s equity	$	7,624	$	7,921


	Three Months Ended September 30,				Nine Months Ended September 30,
Statements of Income - Newtek Merchant Solutions, LLC	2022		2021		2022		2021
Revenue	$	5,894	$	4,864	$	18,144	$	15,191
Expenses	2,477		2,227		7,342		6,873
Income from operations	$	3,417	$	2,637	$	10,802	$	8,318
Interest expense, net	(209)		(120)		(465)		(424)
Income before tax	$	3,208	$	2,517	$	10,337	$	7,894

The Company recorded the following related to its investment in NMS:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Dividend income	$	4,350	$	—	$	11,950	$	—

Unrealized depreciation	$	(2,500)	$	—	$	(1,000)	$	—

Newtek Business Lending, LLC

NBL originates, purchases and sells commercial loans under the SBA’s 504 loans program. The summarized financial information of our unconsolidated subsidiary is as follows:


Newtek Business Lending, LLC Balance Sheets	As of September 30, 2022		As of December 31, 2021
	(unaudited)
Current assets	$	96,899	$	77,776
Noncurrent assets	1,146		2,012
Total assets	$	98,045	$	79,788
Current liabilities	9,172		8,392
Noncurrent liabilities	37,071		35,241
Total liabilities	$	46,243	$	43,633
Total member’s equity	$	51,802	$	36,155


	Three Months Ended September 30,				Nine Months Ended September 30,
Newtek Business Lending, LLC Statements of Income	2022		2021		2022		2021
Revenue	$	3,654	$	2,635	$	8,938	$	8,040
Expenses	1,410		1,028		5,150		3,952
Income from operations	$	2,244	$	1,607	$	3,788	$	4,088

Interest expense, net	788		566		815		913
Operating income	857		1,409		2,973		3,175

Net unrealized (depreciation) appreciation on loans receivable - held for sale, at fair value	$	(1,345)	$	150	$	(1,373)	$	(132)
Realized gain (loss) on derivative transactions	697		(38)		1,771		(38)
Unrealized gain on derivative transactions	1,216		153		1,277		266
Net Income	$	1,425	$	1,674	$	4,648	$	3,271

The Company recorded the following related to its investment in NBL:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Dividend income	$	1,650	$	—	$	3,525	$	—

Unrealized appreciation	$	7,000	$	4,500	$	11,000	$	5,870

SUBSEQUENT EVENTS	9 Months Ended
SUBSEQUENT EVENTS	Sep. 30, 2022
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 17—SUBSEQUENT EVENTS: The Company performed a review of events subsequent to the balance sheet date through the date the financial statements were issued and determined that there were no such events requiring recognition or disclosure in the financial statements.

Schedule of Investments In and Advances to Affiliates

9 Months Ended

Sep. 30, 2022

Investments in and Advances to Affiliates [Abstract]

Schedule of Investments In and Advances to Affiliates


Portfolio Company	Investment1			Amount of Realized Gain (Loss)	Amount of Unrealized Appreciation (Depreciation)	Amount of Interest or Dividends Credited to Income3	Fair Value at December 31, 2021	Gross Additions4	Gross Reductions5	Fair Value at September 30, 2022
	Type	Ownership or Interest Rate
Automated Merchant Services, Inc.	Common Stock2	Own	100%	—	53	720	—	53	—	53

CDS Business Services, Inc.	Common Stock2	Own	100%	—	—	—	—	—	—	—
	Line of Credit	Fixed	5.5%	—	(962)	835	7,300	1,900	(2,862)	6,338

Newtek Technology Solutions, Inc.	Common Stock2	Own	100%	—	(6,400)	—	36,000	400	(6,400)	30,000
	Line of Credit	Fixed	10%	—	—	2,334	11,000	—	—	11,000
	Line of Credit6	Prime plus	0.5%	—	—	2	225	—	(225)	—

Newtek Insurance Agency, LLC	Membership Interest2	Own	100%	—	2,700	—	2,300	2,700	—	5,000

PMTWorks Payroll, LLC	Membership Interest2	Own	100%	—	275	—	—	3,585	(85)	3,500
	Term Loans7	Fixed	10%-12%	—	685	328	2,000	685	(2,685)	—

Small Business Lending, LLC	Membership Interest2	Own	100%	—	(1,265)	—	4,000	3,565	(1,265)	6,300
	Term Loan	Fixed	10%	—	—	165	400	—	—	400

banc-serv Partners, LLC	Membership Interest2	Own	100%	—	—	—	—	—	—	—

Newtek Merchant Solutions, LLC	Membership Interest	Own	100%	—	(3,500)	11,950	114,500	—	(3,500)	111,000

Titanium Asset Management, LLC	Membership Interest2	Own	100%	—	(617)	—	—	822	(617)	205
	Term Loan7	Fixed	10%	—	297	426	603	600	(1,203)	—

Newtek Business Lending, LLC	Membership Interest	Own	100%	—	11,000	3,525	47,406	26,840	—	74,246

Newtek Conventional Lending, LLC	Membership Interest	Own	50%	—	(3,713)	2,019	29,464	250	(13,454)	16,260

Mobil Money, LLC	Membership Interest	Own	100%	—	3,100	275	3,900	3,100	—	7,000

POS on Cloud, LLC	Membership Interest2	Own	55.47%	—	—	—	—	326	—	326
	Term Loan	Fixed	10%	—	—	99	1,300	—	—	1,300


Portfolio Company	Investment1			Amount of Realized Gain (Loss)		Amount of Unrealized Appreciation (Depreciation)		Amount of Interest or Dividends Credited to Income3		Fair Value at December 31, 2021		Gross Additions4		Gross Reductions5		Fair Value at September 30, 2022
	Type	Ownership or Interest Rate

Excel WebSolutions LLC	Membership Interest2	Own	100%	—		(230)		—		—		230		(230)		—
	Term Loans2	Fixed	10%	—		159		69		—		159		(159)		—

Total Controlled Investments				$	—	$	1,582	$	22,747	$	260,398	$	45,215	$	(32,685)	$	272,928

Non-Control Investments
EMCAP Loan Holdings, LLC	Membership Interest	Own	4.67%	—		—		62		1,000		—		—		1,000

Biller Genie Software, LLC	Membership Interest	Own	1.82%	—		—		—		—		360		—		360

Total Non-Control Investments				$	—	$	—	$	62	$	1,000	$	360	$	—	$	1,360

Total Affiliate Investments				$	—	$	1,582	$	22,809	$	261,398	$	45,575	$	(32,685)	$	274,288

This schedule should be read in connection with the Company’s Consolidated Financial Statements, including the Consolidated Schedule of Investments and Notes to the Consolidated Financial Statements.

(1) The principal amount and ownership detail as shown in the Company’s Consolidated Schedule of Investments.

(2) Represents non-income producing security.

(3) Represents the total amount of interest, dividends, and other income credited to income for the period.

(4) Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments and the exchange of one or more existing securities for one or more new securities. Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation.

(5) Gross reductions include decreases in the cost basis of investments resulting from principal payments or sales and exchanges of one or more existing securities for one or more new securities. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation.

(6) Index based floating rate debt investment with interest at rate of Prime plus a contractual spread which typically reset monthly prior to repayment in the second quarter of 2022.

(7) Fixed rate debt investment prior to repayment during the third quarter of 2022.

N-2 - $ / shares

3 Months Ended

9 Months Ended

Sep. 30, 2022

Jun. 30, 2022

Mar. 31, 2022

Dec. 31, 2021

Sep. 30, 2021

Jun. 30, 2021

Mar. 31, 2021

Dec. 31, 2020

Sep. 30, 2020

Sep. 30, 2022

Cover [Abstract]

Entity Central Index Key

0001587987

Amendment Flag

false

Securities Act File Number

814-01035

Document Type

10-Q

Entity Registrant Name

NEWTEK BUSINESS SERVICES CORP.

Entity Address, Address Line One

4800 T Rex Avenue

Entity Address, Address Line Two

Suite 120

Entity Address, City or Town

Boca Raton

Entity Address, State or Province

Entity Address, Postal Zip Code

33431

City Area Code

212

Local Phone Number

356-9500

Entity Emerging Growth Company

false

General Description of Registrant [Abstract]

Investment Objectives and Practices [Text Block]

As a BDC, our investment objective is to generate both current income and capital appreciation primarily through loans originated by our business finance ecosystem and our equity investments in certain portfolio companies that we control.

We target our debt investments, which are principally made through our business finance ecosystem under the SBA 7(a) program, to produce a coupon rate of prime plus 2.25% to 3.00% which enables us to generate rapid sales of guaranteed portions of SBA 7(a) loans in the secondary market. We typically structure our debt investments with the maximum seniority and collateral along with personal guarantees from portfolio company owners, in many cases collateralized by other assets including real estate. In most cases, our debt investment will be collateralized by a first lien on the assets of the portfolio company and a first or second lien on assets of guarantors, in both cases primarily real estate. All SBA loans are made with personal guarantees from any owner(s) of 20% or more of the portfolio company’s equity. The amount of new debt investments, particularly SBA 7(a) loans that we originate, will directly impact future investment income. In addition, future amounts of unrealized appreciation or depreciation on our investments, as well as the amount of realized gains or losses, will also fluctuate depending upon economic conditions and the performance of our investment portfolio. The changes in realized gains and losses and unrealized appreciation or depreciation could have a material impact on our operating results.

We typically structure our debt investments to include non-financial covenants that seek to minimize our risk of capital loss such as lien protection and prohibitions against change of control. Our debt investments have what we believe are strong protections, including default penalties, information rights and, in some cases, board observation rights and affirmative, negative and financial covenants. Debt investments in portfolio companies, including the controlled portfolio companies, have historically and are expected to continue to comprise the majority of our overall investments in number and dollar volume.

While the vast majority of our investments have been structured as debt, we have in the past and expect in the future to make selective equity investments primarily as either strategic investments to enhance the integrated operating platform or, to a lesser degree, under the Capco programs. For investments in our controlled portfolio companies, we focus more on tailoring them to the long term growth needs of the companies than to return. Our objectives with these companies is to foster the development of the businesses as a part of the integrated operational platform of serving the SMB market, so we may reduce the burden on these companies to enable them to grow faster than they would otherwise and as another means of supporting their development.

Share Price [Table Text Block]

Price Range of Common Stock

Our common stock is traded on the Nasdaq Global Market under the symbol “NEWT.” High and low prices for the common stock over the previous two years are set forth below, based on the highest and lowest intraday sales price per share during that period.


	Price Range		NAV1	Premium of High Sales Price to NAV2	Premium of Low Sales Price to NAV2
	High	Low
2020


Third Quarter	$20.50	$16.73	$15.41	33%	9%
Fourth Quarter	$19.82	$16.24	$15.70	26%	3%

2021
First Quarter	$28.63	$18.77	$16.28	76%	15%
Second Quarter	$38.78	$26.41	$16.38	137%	61%
Third Quarter	$36.41	$24.07	$16.23	124%	48%
Fourth Quarter	$32.38	$25.63	$16.72	94%	53%

2022
First Quarter	$28.70	$24.00	$16.49	74%	46%
Second Quarter	$27.18	$17.65	$16.31	67%	8%
Third Quarter	$23.11	$15.65	$16.04	44%	(2)%

(1) Net asset value per share is determined as of the last day in the relevant quarter and therefore may not reflect the net asset value per share on the date of the high and low sales prices. The values reflect net asset value per share and are based on outstanding shares at the end of each period.

(2) Calculated as the respective high or low sales price divided by net asset value and subtracting 1.

Lowest Price or Bid

$ 15.65

$ 17.65

$ 24.00

$ 25.63

$ 24.07

$ 26.41

$ 18.77

$ 16.24

$ 16.73

Highest Price or Bid

$ 23.11

$ 27.18

$ 28.70

$ 32.38

$ 36.41

$ 38.78

$ 28.63

$ 19.82

$ 20.50

Highest Price or Bid, Premium (Discount) to NAV [Percent]

44.00%

67.00%

74.00%

94.00%

124.00%

137.00%

76.00%

26.00%

33.00%

Lowest Price or Bid, Premium (Discount) to NAV [Percent]

(2.00%)

8.00%

46.00%

53.00%

48.00%

61.00%

15.00%

3.00%

9.00%

SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
SIGNIFICANT ACCOUNTING POLICIES (Policies)	Sep. 30, 2022
Accounting Policies [Abstract]
Fair Value	Fair Value The Company applies fair value accounting to certain of its financial instruments in accordance with ASC Topic 820 — Fair Value Measurement (“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC Topic 820, the Company has categorized its financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy. Fair value is a market-based measure considered from the perspective of the market participant who holds the financial instrument rather than an entity-specific measure. Therefore, when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that management believes market participants would use in pricing the financial instrument at the measurement date. The availability of observable inputs can vary depending on the financial instrument and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new, whether the product is traded on an active exchange or in the secondary market and the current market conditions. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for financial instruments classified as Level 3. Any changes to the valuation methodology are reviewed by management and the Board to confirm that the changes are appropriate. As markets change, new products develop and the pricing for products becomes more or less transparent, the Company will continue to refine its valuation methodologies.
Use of Estimates	Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expense during the reporting period. The level of uncertainty in estimates and assumptions increases with the length of time until the underlying transactions are complete. Actual results could differ from those estimates.
Consolidation	Consolidation As provided under ASC Topic 946 — Investment Companies, the Company will generally not consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Assets related to transactions that do not meet ASC Topic 860 — Transfers and Servicing (“ASC Topic 860”) requirements for accounting sale treatment are reflected in the Company’s consolidated statements of assets and liabilities as investments. Those assets are owned by the securitization trusts and are included in the Company’s consolidated financial statements. The creditors of the special purpose entities have received security interests in such assets and such assets are not intended to be available to the creditors of the Company. Although the Company owns more than 25% of the voting securities of NCL, the Company does not have sole control over significant actions of NCL for purposes of the 1940 Act or otherwise, and does not consolidate its interest in NCL.
Cash and Restricted Cash	Cash The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. Invested cash is held exclusively at financial institutions of high credit quality. As of September 30, 2022, cash deposits in excess of insured amounts totaled $43.7 million. The Company has not experienced any losses with respect to cash balances in excess of insured amounts and management does not believe there was a significant concentration of risk with respect to cash balances as of September 30, 2022. Restricted Cash Restricted cash includes amounts due on SBA loan-related remittances to third parties, cash reserves established as part of a voluntary agreement with the SBA, cash reserves associated with securitization transactions, and cash margin as collateral for derivative instruments.
Broker Receivable	Broker Receivable Broker receivable represents amounts due from third parties for loans which have been traded at period end but have not yet settled.
Transfers of Financial Assets and Servicing Assets	Transfers of Financial Assets For a transfer of financial assets to be considered a sale, the transfer must meet the sale criteria of ASC 860, which, at the time of the transfer, require that the transferred assets qualify as recognized financial assets and the Company surrender control over the assets. Such surrender requires that the assets be isolated from the Company, even in bankruptcy or other receivership, the purchaser have the right to pledge or sell the assets transferred and the Company not have an option or obligation to reacquire the assets. If the sale criteria are not met, the transfer is considered to be a secured borrowing, the assets remain on the Company’s consolidated balance sheets and the sale proceeds are recognized as a liability. Since 2010, NSBF has engaged in securitizations of the unguaranteed portions of its SBA 7(a) loans. A securitization uses a special purpose entity (the “Trust”), which is considered a variable interest entity. Applying the consolidation requirements for VIEs under the accounting rules in ASC Topic 860, Transfers and Servicing, and ASC Topic 810, Consolidation, which became effective January 1, 2010, the Company determined that as the primary beneficiary of the securitization vehicle, based on its power to direct activities through its role as servicer for the Trust and its obligation to absorb losses and right to receive benefits, it needed to consolidate the Trusts. The Company therefore consolidates the entities using the carrying amounts of the Trust’s assets and liabilities and reflects the assets in SBA Unguaranteed Non-Affiliate Investments and reflects the associated financing in Notes Payable - Securitization trusts on the Consolidated Statements of Assets and Liabilities. Servicing AssetsThe Company accounts for servicing assets in accordance with ASC Topic 860-50 - Transfers and Servicing - Servicing Assets and Liabilities. Servicing assets are measured at fair value at each reporting date and the Company reports changes in the fair value of servicing assets in earnings in the period in which the changes occur. The Company earns servicing fees from the guaranteed portions of SBA 7(a) loans it originates and sells. The valuation model for servicing assets incorporates assumptions including, but not limited to, servicing costs, discount rate, prepayment rate, and default rate. Considerable judgement is required to estimate the fair value of servicing assets and as such these assets are classified as Level 3 in our fair value hierarchy.
Due to Participants	Due to Participants Due to participants represents amounts due to third party investors in the SBA guaranteed portion of SBA 7(a) and PPP loans. When the Company receives principal payments, including PPP loan forgiveness, after the loan has been either partially or fully sold to the participant, the remittances received by the Company are either owed in part of in full to the participant and amounts are recorded as a liability on the consolidated statements of assets and liabilities.
Derivative Instruments	Derivative Instruments The Company uses derivative instruments primarily to economically manage the fair value variability of fixed rate assets caused by interest rate fluctuations. Derivative instruments consist of interest rate futures and are held at fair value on the balance sheet. Collateral posted with our futures counterparties is segregated in the Company’s books and records. Interest rate futures are centrally cleared by the Chicago Mercantile Exchange (“CME”) through a futures commission merchant. Interest rate futures that are governed by an ISDA agreement provide for bilateral collateral pledging based on the counterparties’ market value. The counterparties have the right to re-pledge the collateral posted but have the obligation to return the pledged collateral, or, if the Company agrees, substantially the same collateral as the market value of the interest rate futures change. The Company is required to post initial margin and daily variation margin for interest rate futures that are centrally cleared by CME. CME determines the fair value of our centrally cleared futures, including daily variation margin. Effective January 3, 2017, CME amended its rulebooks to legally characterize daily variation margin payments for centrally cleared interest rate futures as settlement rather than collateral. As a result of this rule change, variation margin pledged on the Company’s centrally cleared interest rate futures is settled against the realized results of these futures.
Income Taxes	Income Taxes Deferred tax assets and liabilities are computed based upon the differences between the financial statement and income tax basis of assets and liabilities using the enacted tax rates in effect for the year in which those temporary differences are expected to be realized or settled. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. The Company’s U.S. federal and state income tax returns prior to fiscal year 2018 are generally closed, and management continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. The Company has elected to be treated as a RIC under the Code beginning with the 2015 tax year and operates in a manner so as to continue to qualify for the tax treatment applicable to RICs. The RIC tax return includes Newtek Business Services Corp. and NSBF, a single member LLC disregarded for tax purposes. None of the Company’s other subsidiaries are included in the RIC tax return. The Company will evaluate and record any deferred tax assets and liabilities of the subsidiaries that are not included in the RIC tax return. In order to maintain its RIC tax treatment, among other things, the Company is required to meet certain source of income and asset diversification requirements and timely distribute to its stockholders at least 90% of investment company taxable income, as defined by the Code, for each tax year. The Company intends to make the requisite distributions to its stockholders, which will generally relieve the Company from U.S. federal income taxes with respect to any income that is distributed to its stockholders as dividends. If the Company obtains the required Regulatory Approvals and subsequently discontinues its election to be treated as a BDC and converts to a bank holding company, the Company will no longer be subject to the 1940 Act, and the Company would lose its ability to be taxed on a pass-through basis as a RIC. For information on the risks of converting to a bank holding company, see “Item 1A. Risk Factors – Risk Related to Converting to a Financial Holding Company” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 1, 2022. Depending on the level of taxable income earned in a tax year, the Company may choose to retain taxable income in excess of current year dividend distributions and would distribute such taxable income in the next tax year. The Company would then pay a 4% excise tax on such income, as required. To the extent that the Company determines that its estimated current year annual taxable income, determined on a calendar year basis, could exceed estimated current calendar year dividend distributions, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned. For the nine months ended September 30, 2022 and 2021, no U.S. federal excise taxes were due. The Company’s Taxable Subsidiaries accrue income taxes payable based on the applicable corporate rates on the net unrealized appreciation generated by the controlled investments held by the Taxable Subsidiaries. Such deferred tax liabilities amounted to $12.9 million and $12.7 million at September 30, 2022 and December 31, 2021, respectively, and are recorded as deferred tax liabilities on the consolidated statements of assets and liabilities. The change in deferred tax liabilities is included as a component of net unrealized appreciation (depreciation) on investments in the consolidated statements of operations.
Stock Repurchase Program	Stock Repurchase Program On June 21, 2022, the Company's Board of Directors approved a repurchase program under which the Company may repurchase up to 500,000 shares of the Company’s common stock, par value $0.02 per share, through open market purchases, including block purchases, in such manner as will comply with the provisions of the Investment Company Act of 1940 and the Securities Exchange Act of 1934, as amended. Unless extended or terminated by the Company's board of directors, the Company expects the termination date for the repurchase program will be on December 21, 2022. The Company has not repurchased any common shares under the repurchase program during the nine months ended September 30, 2022.
Investment Income	Investment Income Management reviews all loans that become 90 days or more past due on principal or interest or when there is reasonable doubt that principal or interest will be collected for possible placement on management’s designation of non-accrual status. Interest receivable is analyzed regularly and may be reserved against when deemed uncollectible. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current, although we may make exceptions to this general rule if the loan has sufficient collateral value and is in the process of collection. On March 27, 2020, Congress passed, and the President of the United States signed into law, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The CARES Act provided an over $2.0 trillion stimulus package to certain businesses and individuals affected by the COVID-19 pandemic, with subsidies to certain existing SBA 7(a) borrowers in which the SBA paid all principal, interest, and fees on existing performing SBA 7(a) loans for six months beginning with such borrowers’ April 2020 payments. Among other things, the CARES Act allowed NSBF, as an SBA 7(a) lender, to originate loans under the Paycheck Protection Program (“PPP”) as an expansion of the existing SBA Section 7(a) loan program through June 30, 2020, which PPP was extended through May 31, 2021, with PPP lenders allowed to continue to close PPP loans approved by the SBA prior to May 31, 2021. Pursuant to the PPP, the SBA reimbursed NSBF for originating PPP loans and such SBA reimbursements are included as interest income on PPP loans. Such fees were accounted for under ASC-310 Receivables and deferred until the PPP loan participations were sold to one of the banks which had entered into PPP loan participation agreements with NSBF. Refer to NOTE 3—INVESTMENTS. Income earned in connection with the PPP should not be viewed as recurring. NSBF funded the balance of its PPP loans in July 2021. Dividend income is recognized on an accrual basis for preferred equity securities to the extent that such amounts are expected to be collected or realized. In determining the amount of dividend income to recognize, if any, from cash distributions on common equity securities, we will assess many factors including a portfolio company’s cumulative undistributed income and operating cash flow. Cash distributions from common equity securities received in excess of such undistributed amounts are recorded first as a reduction of our investment and then as a realized gain on investment. The Company earns servicing income related to the guaranteed portions of SBA loan investments which it sells into the secondary market. These recurring fees are earned and recorded daily. Servicing income is earned for the full term of the loan or until the loan is repaid. The Company earns a variety of fees from borrowers in the ordinary course of conducting its business, including packaging, legal, late payment and prepayment fees. All other income is recorded when earned. Other income is generally non-recurring in nature and earned as “one time” fees in connection with the origination of new debt investments with non-affiliates. Investment transactions are accounted for on a trade-date basis. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the cost basis of investment, without regard to unrealized gains or losses previously recognized. The Company reports current period changes in the fair value of investments as a component of the net change in unrealized appreciation (depreciation) on investments in the consolidated statements of operations.
Stock-Based Compensation	Stock – Based Compensation The Company accounts for its equity-based compensation plan using the fair value method, as prescribed by ASC Topic 718 – Stock Compensation. Accordingly, for restricted stock awards, the Company measures the grant date fair value based upon the market price of the Company’s common stock on the date of the grant and amortizes this fair value to salaries and benefits ratably over the requisite service period or vesting term.
Recently Adopted Accounting Pronouncements and New Accounting Standards	Recently Adopted Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts and transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, “Reference Rate Reform (Topic 848),” which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition. ASU 2020-04 and ASU 2021-01 are effective as of March 12, 2020 through December 31, 2022. ASU No. 2021-01 provides increased clarity as the Company continues to evaluate the transition of reference rates, however, the impact of the adoption is not expected to be material. The adoption of ASU 2020-04 did not have a material impact on the Company’s consolidated financial statements. In November 2020, the SEC published Release No. IC-34084, Use of Derivatives by Registered Investment Companies and Business Development Companies, and adopted rules amending Rule 18f-4 and Rule 6c-11. Under the newly adopted rules, BDCs that use derivatives will be subject to a value-at-risk leverage limit, a derivatives risk management program and certain testing and board reporting requirements. These new requirements will apply unless the BDC qualifies as a “limited derivatives user,” as defined under the adopted rules, provided that the BDC adopts written policies and procedures that are reasonably designed to manage the BDC’s derivatives risks and comply with certain record keeping requirements. Under the new rule, a BDC may enter into an unfunded commitment agreement that is not a derivatives transaction, such as an agreement to provide financing to a portfolio company, if the BDC has, among other things, a reasonable belief, at the time it enters into such an agreement, that it will have sufficient cash and cash equivalents to meet its obligations with respect to all of its unfunded commitment agreements, in each case as it becomes due. The Company currently qualifies as a “limited derivatives user” and expects to continue to do so and has adopted written policies and procedures that are reasonably designed to manage the Company’s derivatives risks and comply with the record keeping requirements. In December 2020, Rule 2a-5 under the 1940 Act was adopted by the SEC and establishes requirements for determining fair value in good faith for purposes of the 1940 Act. The adoption of Rule 2a-5 did not have a material impact on the consolidated financial statements. New Accounting Standards In June 2022, the FASB issued ASU No. 2022-03, “Fair Value Measurement (Topic 820),” which clarifies the guidance in Topic 820 when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The amendments affect all entities that have investments in equity securities measured at fair value that are subject to a contractual sale restriction. ASU 2022-03 is effective for public business entities for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. For all other entities the amendments are effective for fiscal years beginning after December 15, 2024, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. An entity that qualifies as an investment company under Topic 946 should apply the amendments in ASU No. 2022-03 to an investment in an equity security subject to a contractual sale restriction that is executed or modified on or after the date of adoption. The Company is currently evaluating the impact of adopting ASU No. 2022-03 on the consolidated financial statements.
Segments	Segments The Company has determined that it has a single reporting segment and operating unit structure. The Company issues debt and makes equity investments in portfolio companies in various industries. The Company separately evaluates the performance of each of its lending and investment relationships. However, because each of these debt and equity investment relationships have similar business and economic characteristics, they have been aggregated into a single lending and investment segment.
Reclassifications	Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation.
Fair Value Measurements	Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. In determining fair value, management uses various valuation approaches, all of which have been approved by the Company’s Board. In accordance with GAAP, a fair value hierarchy for inputs is used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The fair value hierarchy gives the highest priority (Level 1) to quoted prices in active markets for identical assets or liabilities and gives the lowest priority to unobservable inputs (Level 3). The levels of the fair value hierarchy are as follows: Level 1Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an active exchange market, as well as certain U.S. Treasury, other U.S. Government and agency mortgage-backed debt securities that are highly liquid and are actively traded in over-the-counter markets. Level 2Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes certain U.S. Government and agency mortgage-backed debt securities, corporate debt securities, derivative contracts and residential mortgage loans held-for-sale. Level 3Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain private equity investments, retained residual interests in securitizations, residential mortgage servicing rights, and highly structured or long-term derivative contracts.

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Tables)

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of wholly-owned subsidiaries

The following wholly-owned subsidiaries are consolidated in the financial statements of the Company:


Newtek Small Business Finance, LLC
Newtek Asset Backed Securities, LLC
CCC Real Estate Holdings, LLC
The Whitestone Group, LLC
Wilshire DC Partners, LLC
Wilshire Holdings I, Inc.1
Wilshire Louisiana BIDCO, LLC
Wilshire Louisiana Partners II, LLC
Wilshire Louisiana Partners III, LLC
Wilshire Louisiana Partners IV, LLC
Wilshire New York Advisers II, LLC
Wilshire New York Partners III, LLC
Wilshire Partners, LLC
Exponential Business Development Co., Inc.1
Newtek Commercial Lending, Inc.1
Newtek LSP Holdco, LLC
NBSH Holdings, LLC
Newtek Business Services Holdco 1, Inc.1 (surviving entity of January 2021 merger with Newtek Business Services Holdco 2, Inc.)
Newtek Business Services Holdco 3, Inc.1
Newtek Business Services Holdco 4, Inc.1
Newtek Business Services Holdco 5, Inc.1 (formerly Banc-Serv Acquisition, Inc.)
Newtek Business Services Holdco 6, Inc.1

(1) Taxable Subsidiaries

SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Reconciliation of cash

The following table provides a reconciliation of cash and restricted cash as of September 30, 2022 and 2021 and December 31, 2021 and 2020:


	September 30, 2022		September 30, 2021		December 31, 2021		December 31, 2020
Cash	$	7,355	20,193		2,397		$	2,073
Restricted cash	74,777		182,913		184,463		49,352
Cash and restricted cash	$	82,132	$	203,106	$	186,860	$	51,425

Reconciliation of restricted cash

The following table provides a reconciliation of cash and restricted cash as of September 30, 2022 and 2021 and December 31, 2021 and 2020:


	September 30, 2022		September 30, 2021		December 31, 2021		December 31, 2020
Cash	$	7,355	20,193		2,397		$	2,073
Restricted cash	74,777		182,913		184,463		49,352
Cash and restricted cash	$	82,132	$	203,106	$	186,860	$	51,425

INVESTMENTS (Tables)

9 Months Ended

Sep. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Investment holdings, schedule of investments

Investments, all of which are in portfolio companies in the United States, consisted of the following at:


	September 30, 2022				December 31, 2021
	Cost		Fair Value		Cost		Fair Value

Non-affiliate debt investments	$	524,048	$	511,325	$	497,698	$	497,387
Non-control investments:
Equity	1,360		1,360		1,000		1,000

Controlled investments:
Equity	118,125		237,630		93,717		208,106
Equity interest in NCL (Joint Venture)	17,412		16,260		26,903		29,464
Debt	32,700		19,038		36,669		22,828
Total investments	$	693,645	$	785,613	$	655,987	$	758,785

SBA unguaranteed investments consisted of the following breakdown of accrual and non-accrual loans at:


	September 30, 2022				December 31, 2021
	Cost		Fair Value		Cost		Fair Value
Accrual	$	443,542	$	457,261	$	377,845	$	393,910
Non-Accrual	58,858		31,115		54,125		30,507
Total SBA unguaranteed investments	$	502,400	$	488,376	$	431,970	$	424,417

SBA guaranteed investments consisted of the following breakdown of accrual and non-accrual loans at:


	September 30, 2022				December 31, 2021
	Cost		Fair Value		Cost		Fair Value
Accrual	$	16,802	$	18,103	$	61,474	$	68,716
Non-Accrual	4,846		4,846		4,254		4,254
Total SBA guaranteed investments	$	21,648	$	22,949	$	65,728	$	72,970

The following table shows the Company’s SBA guaranteed accrual loans by SBA loan type at:


	September 30, 2022				December 31, 2021
	Cost		Fair Value		Cost		Fair Value
7(a)	$	16,727	$	18,028	$	60,610	$	67,852
PPP	75		75		864		864
Accrual SBA guaranteed investments	$	16,802	$	18,103	$	61,474	$	68,716

The following table shows the Company’s portfolio investments by industry at:


	September 30, 2022				December 31, 2021
	Cost		Fair Value		Cost		Fair Value
Data Processing, Hosting, and Related Services	$	61,083	$	164,722	$	59,552	$	169,043
Securities, Commodity Contracts, and Other Financial Investments and Related Activities	88,769		88,628		69,473		60,553
Food Services and Drinking Places	48,101		49,595		48,782		51,840
Specialty Trade Contractors	37,271		35,165		25,250		24,745
Professional, Scientific, and Technical Services	35,799		34,338		27,374		27,213
Amusement, Gambling, and Recreation Industries	27,886		29,565		28,806		29,578
Ambulatory Health Care Services	27,902		26,265		23,078		21,483
Administrative and Support Services	22,869		21,908		25,320		25,036
Truck Transportation	24,437		20,685		24,929		21,937
Merchant Wholesalers, Durable Goods	19,212		19,362		14,725		15,107
Repair and Maintenance	16,536		16,924		18,301		18,752
Merchant Wholesalers, Nondurable Goods	17,589		16,877		12,649		12,115
Personal and Laundry Services	12,415		12,945		11,218		11,935
Fabricated Metal Product Manufacturing	12,407		12,827		15,138		16,104
Construction of Buildings	11,358		10,588		6,404		5,909
Social Assistance	9,100		9,791		12,967		14,401
Accommodation	10,684		9,691		13,795		13,529
Support Activities for Mining	10,543		9,623		12,760		11,427
Rental and Leasing Services	8,910		9,080		8,529		8,505
Motor Vehicle and Parts Dealers	9,116		9,066		12,435		13,016
Nursing and Residential Care Facilities	8,194		8,837		4,781		5,206
Transportation Equipment Manufacturing	7,697		8,044		9,599		10,461
Building Material and Garden Equipment and Supplies Dealers	7,637		7,990		6,504		6,845
Food Manufacturing	9,484		7,823		12,760		11,427
NCL (Joint Venture)	17,412		16,260		26,903		29,464
Other	131,234		129,014		123,955		123,154
Total	$	693,645	$	785,613	$	655,987	$	758,785

The following table shows NCL’s individual investments as of September 30, 2022:


Portfolio Company	Industry	Investment Type	Interest Rate		Maturity	Principal		Cost		Fair Value1
10 28th Ave SW Associates LLC	Fitness and Recreational Sport Centers	Term Loan	5 Yr Libor plus	5.50%	4/1/2045	$	2,192	$	2,148	$	2,038
10 28th Ave SW Associates LLC	Fitness and Recreational Sport Centers	Term Loan	5 Yr Libor plus	5.50%	4/1/2045	1,234		1,206		1,147
Cocoa Beach Office LLC	Other Activities Related to Credit Intermediation	Term Loan	2 Yr Libor plus	5.70%	8/1/2044	416		402		408
Foxhall Hospitality, LLC	Hotels (except Casino Hotels) and Motels	Term Loan	5 Yr Libor plus	6.00%	11/1/2044	10,202		9,999		9,781
Foxhall Hospitality, LLC	Hotels (except Casino Hotels) and Motels	Term Loan	5 Yr Libor plus	6.00%	11/1/2044	5,967		5,849		5,721
The Camera Division, LLC	Commercial & Industrial Machinery & Equipment	Term Loan	5 Yr Libor plus	7.25%	9/1/2029	10,475		10,177		10,305
The Emerald Green Group, LLC	Full-Service Restaurant	Term Loan	2 Yr Libor plus	5.65%	8/1/2029	3,515		3,359		3,251
XL Soccer World Orlando II LLC	Fitness and Recreational Sport Centers	Term Loan	Prime plus	3.25%	11/1/2045	4,882		4,733		4,664
XL Sports World NJ LLC and XL Soccer World Orlando LLC	Fitness and Recreational Sport Centers	Term Loan	5 Yr Libor plus	5.50%	8/1/2044	5,197		5,047		4,972
XL Sports World NJ LLC and XL Soccer World Orlando LLC	Fitness and Recreational Sport Centers	Term Loan	5 Yr Libor plus	5.50%	8/1/2044	4,630		4,514		4,393
Tricare Unlimited LLC and Geron Enterprises LLC	Nursing Care Facilities(Skilled Nursing Facilities)	Term Loan	2 Yr Treasury plus	6.51%	1/1/2045	5,549		5,397		5,479
E Entities LLC	Exterminating & Pest Control Services	Term Loan	5 Yr Treasury plus	7.71%	1/1/2030	4,871		4,748		4,874
Trinity MCC Realty, LLC	Motor Vehicle and Parts Dealers	Term Loan	5 Yr Treasury plus	6.58%	2/1/2045	4,497		4,357		4,327
Jaffe Real Estate LLC	Full-Service Restaurant	Term Loan	5 Yr Treasury plus	7.93%	4/1/2045	2,207		2,146		2,249
ARC Metal Stamping, LLC	Industrial Mold Manufacturing	Term Loan	5 Yr Treasury plus	7.43%	1/1/2045	5,336		5,336		5,324
McNeill Properties V, LLC	Fitness and Recreational Sport Centers	Term Loan	5 Yr Treasury plus	8.00%	9/1/2046	10,209		10,209		10,160
Total						$	81,379	$	79,627	$	79,093

(1) Fair value determined using significant unobservable inputs.

The following table shows NCL’s individual investments as of December 31, 2021:


Portfolio Company	Industry	Investment Type	Interest Rate		Maturity	Principal		Cost		Fair Value1
10 28th Ave SW Associates LLC	Fitness and Recreational Sport Centers	Term Loan	5 Yr Libor plus	5.50%	4/1/2045	$	2,225	$	2,181	$	2,117
10 28th Ave SW Associates LLC	Fitness and Recreational Sport Centers	Term Loan	5 Yr Libor plus	5.50%	4/1/2045	1,253		1,225		1,192
Cocoa Beach Office LLC	Other Activities Related to Credit Intermediation	Term Loan	2 Yr Libor plus	5.70%	8/1/2044	422		407		415
Foxhall Hospitality, LLC	Hotels (except Casino Hotels) and Motels	Term Loan	5 Yr Libor plus	6.00%	11/1/2044	10,321		10,115		10,447
Foxhall Hospitality, LLC	Hotels (except Casino Hotels) and Motels	Term Loan	5 Yr Libor plus	6.00%	11/1/2044	6,037		5,917		6,110
The Camera Division, LLC	Commercial & Industrial Machinery & Equipment	Term Loan	5 Yr Libor plus	7.25%	9/1/2029	11,050		10,734		11,203
The Emerald Green Group, LLC	Full-Service Restaurant	Term Loan	2 Yr Libor plus	5.65%	8/1/2029	5,510		5,344		5,173
XL Soccer World Orlando II LLC	Fitness and Recreational Sport Centers	Term Loan	Prime plus	3.25%	11/1/2045	4,986		4,836		4,907
XL Sports World NJ LLC and XL Soccer World Orlando LLC	Fitness and Recreational Sport Centers	Term Loan	5 Yr Libor plus	5.55%	8/1/2044	6,094		5,943		6,241
XL Sports World NJ LLC and XL Soccer World Orlando LLC	Fitness and Recreational Sport Centers	Term Loan	5 Yr Libor plus	5.55%	8/1/2044	4,686		4,570		4,738
Tricare Unlimited LLC and Geron Enterprises LLC	Nursing Care Facilities(Skilled Nursing Facilities)	Term Loan	2 Yr Treasury plus	6.51%	1/1/2045	5,617		5,463		5,838
E Entities LLC	Exterminating & Pest Control Services	Term Loan	5 Yr Treasury plus	7.71%	1/1/2030	5,244		5,113		5,526
Trinity MCC Realty, LLC	Motor Vehicle and Parts Dealers	Term Loan	5 Yr Treasury plus	6.58%	2/1/2045	5,092		4,950		5,260
Jaffe Real Estate LLC	Full-Service Restaurant	Term Loan	5 Yr Treasury plus	7.93%	4/1/2045	2,228		2,167		2,453
Berry Ventures Inc	Painting & Wall Covering Contractors	Term Loan	5 Yr Treasury plus	7.25%	4/1/2045	212		199		225
ARC Metal Stamping, LLC	Industrial Mold Manufacturing	Term Loan	5 Yr Treasury plus	7.43%	1/1/2045	5,383		5,383		5,809
McNeill Properties V, LLC	Fitness and Recreational Sport Centers	Term Loan	5 Yr Treasury plus	8.00%	9/1/2046	10,277		10,277		11,472
Total						$	86,637	$	84,824	$	89,126

(1) Fair value determined using significant unobservable inputs.

TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTY TRANSACTIONS (Tables)

9 Months Ended

Sep. 30, 2022

Investments in and advances to affiliates

Transactions related to our investments with controlled and non-controlled affiliated companies for the nine months ended September 30, 2022 were as follows:


Portfolio Company	Fair Value at December 31, 2021		Purchases (Cost)		Principal Received		Net Realized Gains/(Losses)		Net Unrealized Gains/(Losses)		Fair Value at September 30, 2022		Interest and Other Income		Dividend Income
Controlled Investments
Newtek Merchant Solutions, LLC	$	114,500	$	—	$	—	$	—	$	(3,500)	$	111,000	$	—	$	11,950
Automated Merchant Services, LLC	—		—		—		—		53		53		—		720
Mobil Money, LLC	3,900		—		—		—		3,100		7,000		—		275
Newtek Technology Solutions, Inc.	47,225		400		(225)		—		(6,400)		41,000		837		1,500
banc-serv Partners, LLC	—		—		—		—		—		—		—		—
CDS Business Services, Inc.	7,300		1,900		(1,900)		—		(962)		6,338		835		—
Small Business Lending, LLC	4,400		3,565		—		—		(1,265)		6,700		165		—
Newtek Insurance Agency, LLC	2,300		—		—		—		2,700		5,000		—		—
PMTWorks Payroll, LLC	2,000		3,225		(2,685)		—		960		3,500		328		—
Titanium Asset Management LLC	603		822		(900)		—		(320)		205		426		—
POS on Cloud, LLC	1,300		326		—		—		—		1,626		99		—
Excel WebSolutions, LLC	—		230		(159)		—		(71)		—		69		—
Newtek Conventional Lending, LLC	29,464		250		(9,741)		—		(3,713)		16,260		—		2,019
Newtek Business Lending, LLC	47,406		15,840		—		—		11,000		74,246		—		3,525
Total Controlled Investments	$	260,398	$	26,558	$	(15,610)	$	—	$	1,582	$	272,928	$	2,759	$	19,989

Non-Control Investments
EMCAP Loan Holdings, LLC	$	1,000	$	—	$	—	$	—	$	—	$	1,000	$	—	$	62
Biller Genie Software, LLC	—		360		—		—		—		360		—		—
Total Non-Control Investments	$	1,000	$	360	$	—	$	—	$	—	$	1,360	$	—	$	62

Total Affiliate Investments	$	261,398	$	26,918	$	(15,610)	$	—	$	1,582	$	274,288	$	2,759	$	20,051


Portfolio Company	Investment1			Amount of Realized Gain (Loss)	Amount of Unrealized Appreciation (Depreciation)	Amount of Interest or Dividends Credited to Income3	Fair Value at December 31, 2021	Gross Additions4	Gross Reductions5	Fair Value at September 30, 2022
	Type	Ownership or Interest Rate
Automated Merchant Services, Inc.	Common Stock2	Own	100%	—	53	720	—	53	—	53

CDS Business Services, Inc.	Common Stock2	Own	100%	—	—	—	—	—	—	—
	Line of Credit	Fixed	5.5%	—	(962)	835	7,300	1,900	(2,862)	6,338

Newtek Technology Solutions, Inc.	Common Stock2	Own	100%	—	(6,400)	—	36,000	400	(6,400)	30,000
	Line of Credit	Fixed	10%	—	—	2,334	11,000	—	—	11,000
	Line of Credit6	Prime plus	0.5%	—	—	2	225	—	(225)	—

Newtek Insurance Agency, LLC	Membership Interest2	Own	100%	—	2,700	—	2,300	2,700	—	5,000

PMTWorks Payroll, LLC	Membership Interest2	Own	100%	—	275	—	—	3,585	(85)	3,500
	Term Loans7	Fixed	10%-12%	—	685	328	2,000	685	(2,685)	—

Small Business Lending, LLC	Membership Interest2	Own	100%	—	(1,265)	—	4,000	3,565	(1,265)	6,300
	Term Loan	Fixed	10%	—	—	165	400	—	—	400

banc-serv Partners, LLC	Membership Interest2	Own	100%	—	—	—	—	—	—	—

Newtek Merchant Solutions, LLC	Membership Interest	Own	100%	—	(3,500)	11,950	114,500	—	(3,500)	111,000

Titanium Asset Management, LLC	Membership Interest2	Own	100%	—	(617)	—	—	822	(617)	205
	Term Loan7	Fixed	10%	—	297	426	603	600	(1,203)	—

Newtek Business Lending, LLC	Membership Interest	Own	100%	—	11,000	3,525	47,406	26,840	—	74,246

Newtek Conventional Lending, LLC	Membership Interest	Own	50%	—	(3,713)	2,019	29,464	250	(13,454)	16,260

Mobil Money, LLC	Membership Interest	Own	100%	—	3,100	275	3,900	3,100	—	7,000

POS on Cloud, LLC	Membership Interest2	Own	55.47%	—	—	—	—	326	—	326
	Term Loan	Fixed	10%	—	—	99	1,300	—	—	1,300


Portfolio Company	Investment1			Amount of Realized Gain (Loss)		Amount of Unrealized Appreciation (Depreciation)		Amount of Interest or Dividends Credited to Income3		Fair Value at December 31, 2021		Gross Additions4		Gross Reductions5		Fair Value at September 30, 2022
	Type	Ownership or Interest Rate

Excel WebSolutions LLC	Membership Interest2	Own	100%	—		(230)		—		—		230		(230)		—
	Term Loans2	Fixed	10%	—		159		69		—		159		(159)		—

Total Controlled Investments				$	—	$	1,582	$	22,747	$	260,398	$	45,215	$	(32,685)	$	272,928

Non-Control Investments
EMCAP Loan Holdings, LLC	Membership Interest	Own	4.67%	—		—		62		1,000		—		—		1,000

Biller Genie Software, LLC	Membership Interest	Own	1.82%	—		—		—		—		360		—		360

Total Non-Control Investments				$	—	$	—	$	62	$	1,000	$	360	$	—	$	1,360

Total Affiliate Investments				$	—	$	1,582	$	22,809	$	261,398	$	45,575	$	(32,685)	$	274,288

(1) The principal amount and ownership detail as shown in the Company’s Consolidated Schedule of Investments.

(2) Represents non-income producing security.

(3) Represents the total amount of interest, dividends, and other income credited to income for the period.

(6) Index based floating rate debt investment with interest at rate of Prime plus a contractual spread which typically reset monthly prior to repayment in the second quarter of 2022.

(7) Fixed rate debt investment prior to repayment during the third quarter of 2022.

Transactions with affiliated companies and related party transactions


	Three Months Ended				Nine Months Ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Managed technology services	$	65	$	532	$	1,107	$	1,475
Origination and loan processing	3,884		3,187		10,140		10,856
Loan servicing	—		14		—		41

Payroll processing fees	10		8		26		25
Total	$	3,959	$	3,741	$	11,273	$	12,397

The Company also sub-leases portions of its office space in Lake Success, New York to certain portfolio companies. Amounts charged were as follows:


	Three Months Ended				Nine Months Ended
Portfolio Company	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Newtek Merchant Solutions, LLC	$	69	$	63	$	220	$	187
Newtek Technology Solutions, Inc.	2		2		8		8
Small Business Lending, LLC	97		80		286		230
Newtek Insurance Agency, LLC	11		17		42		52
CDS Business Services, Inc.	17		18		54		56
PMTWorks Payroll, LLC	2		3		6		14
Newtek Business Lending, LLC	2		2		6		5
Total	$	200	$	185	$	622	$	552

The table below summarizes amounts charged to each controlled portfolio company, and are recorded as a credit to salaries and benefits in the consolidated statements of operations.


	Three Months Ended				Nine Months Ended
Portfolio Company	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Newtek Merchant Solutions, LLC	$	121	$	106	$	358	$	338
Newtek Technology Solutions, Inc. (NTS)	103		107		309		358
PMTWorks Payroll, LLC	31		23		80		65
Newtek Insurance Agency, LLC	48		32		118		95
Newtek Conventional Lending, LLC	3		5		12		5
POS on Cloud, LLC	4		—		4		—
CDS Business Services, Inc.	81		64		228		148
Mobil Money, LLC	23		28		66		86
Newtek Business Lending, LLC	56		43		161		119
Small Business Lending, LLC	142		130		422		382
Total	$	612	$	538	$	1,758	$	1,596

SERVICING ASSETS (Tables)

9 Months Ended

Sep. 30, 2022

Transfers and Servicing [Abstract]

Fair value and valuation assumption

The following tables summarizes the fair value and valuation assumptions related to servicing assets at September 30, 2022 and December 31, 2021:


	Servicing Assets			Weighted		Range
Date	Fair Value		Unobservable Input	Average		Minimum		Maximum
September 30, 2022	$	33,530	Discount factor1	12.60	%	12.60	%	12.60	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%

December 31, 2021	$	28,008	Discount factor1	12.60	%	12.60	%	12.60	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%

(1) Determined based on risk spreads and observable secondary market transactions.


	Fair Value as of			Weighted		Range
	September 30, 2022		Unobservable Input	Average1		Minimum		Maximum
Assets:
SBA unguaranteed non-affiliate investments - accrual loans	$	457,261	Market yields	7.60	%	7.60	%	7.60	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%
SBA unguaranteed non-affiliate investments - non-accrual loans	$	31,115	Market yields	9.50	%	9.50	%	9.50	%

			Average cumulative default rate	30.00	%	30.00	%	30.00	%
Controlled equity investments1	$	237,630	EBITDA multiples-TTM2	7.4x		6.50x		8.00x
			EBITDA multiples-NTM2	6.9x		5.75x		7.50x
			Revenue multiples2	2.37x		0.80x		3.10x
			Book value multiples2	1.00x		0.80x		1.20x
			Earnings-NTM2	6.50x		6.00x		7.00x
			Weighted average cost of capital2	12.83	%	11.60	%	19.40	%

Controlled debt investments	$	19,038	Market yields	8.52	%	5.50	%	10.00	%

Non-control equity investments	$	1,000	Market yields	10.00	%	8.00	%	12.00	%
	$	360	Cost basis	N/A		N/A		N/A



Servicing assets	$	33,530	Market yields	12.60	%	12.60	%	12.60	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%
Other real estate owned	$	2,315	Appraised value	N/A		N/A		N/A

(1) Weighted by relative fair value.


	Fair Value as of			Weighted		Range
	December 31, 2021		Unobservable Input	Average1		Minimum		Maximum
Assets:
SBA unguaranteed non-affiliate investments - accrual loans	$	393,910	Market yields	4.50	%	4.50	%	4.50	%
			Cumulative prepayment rate	22.00	%	22.00	%	22.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%
SBA unguaranteed non-affiliate investments - non-accrual loans	$	30,507	Market yields	4.85	%	4.85	%	4.85	%

			Average cumulative default rate	30.00	%	30.00	%	30.00	%
Controlled equity investments1	$	208,106	EBITDA multiples-TTM2	8.30x		7.50x		9.00x
			EBITDA multiples-NTM2	7.50x		6.30x		8.25x
			Revenue multiples2	2.67x		1.10x		3.50x
			Weighted average cost of capital2	12.34	%	11.00	%	18.50	%
Controlled debt investments	$	22,828	Market yields	8.52	%	3.80	%	12.00	%
Non-control equity investments	$	1,000	Market yields	9.50	%	8.00	%	12.00	%

Servicing assets	$	28,008	Market yields	12.60	%	12.60	%	12.60	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%
Other real estate owned	$	2,354	Appraised value	N/A		N/A		N/A

(1) Weighted by relative fair value.

FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Schedule of fair value, assets and liabilities measured on recurring basis


	Fair Value Measurements at September 30, 2022
	Total		Level 1		Level 2		Level 3
Assets:

SBA unguaranteed non-affiliate investments	$	488,376	$	—	$	—	$	488,376
SBA guaranteed non-affiliate investments	22,949		—		22,949		—
Controlled investments	272,928		—		—		256,668
Other real estate owned1	2,315		—		—		2,315
Non-control investments	1,360		—		—		1,360
Servicing assets	33,530		—		—		33,530

Controlled investments measured at NAV2	16,260		—		—		—
Total assets	$	837,718	$	—	$	22,949	$	782,249

(1) Included in Other Assets on the Consolidated Statements of Assets and Liabilities.


	Fair Value Measurements at December 31, 2021
	Total		Level 1		Level 2		Level 3
Assets:

SBA unguaranteed non-affiliate investments	$	424,417	$	—	$	—	$	424,417
SBA guaranteed non-affiliate investments	72,970		—		72,970		—
Controlled investments	230,934		—		—		230,934
Other real estate owned1	2,354		—		—		2,354
Non-control investments	1,000		—		—		1,000
Servicing assets	28,008		—		—		28,008
Controlled investments measured at NAV2	29,464		—		—		—
Total assets	$	789,147	$	—	$	72,970	$	686,713
Liabilities:
Derivative instruments3	$	183	$	—	$	183	$	—

(1) Included in Other Assets on the Consolidated Statements of Assets and Liabilities.

(3) Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.

Fair value, assets measured on recurring basis, unobservable input reconciliation

The following tables represents the changes in investments, servicing assets and liabilities measured at fair value using Level 3 inputs for the nine months ended September 30, 2022 and 2021:


	Nine Months Ended September 30, 2022
	SBA Unguaranteed Investments		Controlled Investments		Servicing Assets		Non-Control Investments		Other Real Estate Owned1
Fair value, December 31, 2021	$	424,417	$	230,935	$	28,008	$	1,000	$	2,354
Net change in unrealized appreciation (depreciation) on investments	(6,473)		5,295		—		—		(172)

Change in net unrealized depreciation on servicing assets due to factors other than changes in valuation inputs or assumptions	—		—		(3,964)		—		—
Realized loss	(8,131)		—		—		—		(205)
SBA unguaranteed non-affiliate investments, funded	142,974		—		—		—		—
Foreclosed real estate acquired	(1,646)		—		—		—		1,646
Purchase of investments	—		26,308		—		360		—

Sale of investment	—		—		—		—		(1,308)






Principal payments received on debt investments	(63,365)		(5,870)		—		—		—
Additions to servicing assets	—		—		9,486		—		—
Fair value, September 30, 2022	$	488,377	$	256,668	$	33,530	$	1,360	$	2,315

(1) Included in Other Assets on the Consolidated Statements of Assets and Liabilities.


	Nine Months Ended September 30, 2021
	SBA Unguaranteed Investments		Controlled Investments		Servicing Assets		Non-Control Investments		Other Real Estate Owned1
Fair value, December 31, 2020	$	407,748	$	219,143	$	26,061	$	6,447	$	2,717
Net change in unrealized appreciation (depreciation) on investments	2,583		1,233		—		521		(73)
Change in net unrealized appreciation on servicing assets due to changes in valuation inputs or assumptions	—		—		(2,440)		—		—
Change in net unrealized depreciation on servicing assets due to factors other than changes in valuation inputs or adjustments	—		—		(882)		—		—
Realized loss	(7,297)		—		—		—		(279)
SBA unguaranteed non-affiliate investments, funded	48,473		—		—		—		—
Foreclosed real estate acquired	(1,654)		—		—		—		1,654
Purchase of investments	—		36,940		—		—		—
Purchase of loans from SBA	6,945		—		—		—		—
Sale of investment	—		—		—		—		(1,281)





Return of investment	—		(15,000)		—		—		—
Principal payments received on debt investments	(50,217)		—		—		(47)		—
Additions to servicing assets	—		—		6,160		—		—
Fair value, September 30, 2021	$	406,581	$	242,316	$	28,899	$	6,921	$	2,738

(1) Included in Other Assets on the Consolidated Statements of Assets and Liabilities.

Fair value and valuation assumption

The following tables summarizes the fair value and valuation assumptions related to servicing assets at September 30, 2022 and December 31, 2021:


	Servicing Assets			Weighted		Range
Date	Fair Value		Unobservable Input	Average		Minimum		Maximum
September 30, 2022	$	33,530	Discount factor1	12.60	%	12.60	%	12.60	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%

December 31, 2021	$	28,008	Discount factor1	12.60	%	12.60	%	12.60	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%

(1) Determined based on risk spreads and observable secondary market transactions.


	Fair Value as of			Weighted		Range
	September 30, 2022		Unobservable Input	Average1		Minimum		Maximum
Assets:
SBA unguaranteed non-affiliate investments - accrual loans	$	457,261	Market yields	7.60	%	7.60	%	7.60	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%
SBA unguaranteed non-affiliate investments - non-accrual loans	$	31,115	Market yields	9.50	%	9.50	%	9.50	%

			Average cumulative default rate	30.00	%	30.00	%	30.00	%
Controlled equity investments1	$	237,630	EBITDA multiples-TTM2	7.4x		6.50x		8.00x
			EBITDA multiples-NTM2	6.9x		5.75x		7.50x
			Revenue multiples2	2.37x		0.80x		3.10x
			Book value multiples2	1.00x		0.80x		1.20x
			Earnings-NTM2	6.50x		6.00x		7.00x
			Weighted average cost of capital2	12.83	%	11.60	%	19.40	%

Controlled debt investments	$	19,038	Market yields	8.52	%	5.50	%	10.00	%

Non-control equity investments	$	1,000	Market yields	10.00	%	8.00	%	12.00	%
	$	360	Cost basis	N/A		N/A		N/A



Servicing assets	$	33,530	Market yields	12.60	%	12.60	%	12.60	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%
Other real estate owned	$	2,315	Appraised value	N/A		N/A		N/A

(1) Weighted by relative fair value.


	Fair Value as of			Weighted		Range
	December 31, 2021		Unobservable Input	Average1		Minimum		Maximum
Assets:
SBA unguaranteed non-affiliate investments - accrual loans	$	393,910	Market yields	4.50	%	4.50	%	4.50	%
			Cumulative prepayment rate	22.00	%	22.00	%	22.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%
SBA unguaranteed non-affiliate investments - non-accrual loans	$	30,507	Market yields	4.85	%	4.85	%	4.85	%

			Average cumulative default rate	30.00	%	30.00	%	30.00	%
Controlled equity investments1	$	208,106	EBITDA multiples-TTM2	8.30x		7.50x		9.00x
			EBITDA multiples-NTM2	7.50x		6.30x		8.25x
			Revenue multiples2	2.67x		1.10x		3.50x
			Weighted average cost of capital2	12.34	%	11.00	%	18.50	%
Controlled debt investments	$	22,828	Market yields	8.52	%	3.80	%	12.00	%
Non-control equity investments	$	1,000	Market yields	9.50	%	8.00	%	12.00	%

Servicing assets	$	28,008	Market yields	12.60	%	12.60	%	12.60	%
			Cumulative prepayment rate	25.00	%	25.00	%	25.00	%
			Average cumulative default rate	25.00	%	25.00	%	25.00	%
Other real estate owned	$	2,354	Appraised value	N/A		N/A		N/A

(1) Weighted by relative fair value.

BORROWINGS (Tables)

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Schedule of long-term debt instruments

At September 30, 2022 and December 31, 2021, the Company had borrowings comprised of the following:


	September 30, 2022						December 31, 2021
	Commitments		Borrowings Outstanding		Weighted Average Interest Rate		Commitments		Borrowings Outstanding		Weighted Average Interest Rate
Capital One line of credit - guaranteed1	$	150,000	$	67,500	5.50	%	$	150,000	$	50,000	2.50	%
Capital One line of credit - unguaranteed1	—		—		5.00	%	—		—		3.50	%

2024 Notes	38,250		37,847		5.75	%	38,250		37,679		5.75	%
2025 6.85% Notes2	—		—		—		15,000		14,545		6.85	%
2025 5.00% Notes2	30,000		29,246		5.00	%	—		—		—
2026 Notes	115,000		112,666		5.50	%	115,000		112,128		5.50	%
Notes payable - related parties	50,000		150		4.78	%	50,000		11,450		2.60	%
Notes payable - Securitization Trusts	302,253		298,125		4.61	%	249,750		246,250		2.05	%
Total	$	685,503	$	545,534	5.00	%	$	618,000	$	472,052	3.38	%

(1) Total combined commitments of the guaranteed and unguaranteed lines of credit were $150.0 million at September 30, 2022 and December 31, 2021.

Outstanding borrowings under the 2024 Notes, 2025 Notes, 2026 Notes, and Notes payable - Securitization Trusts consisted of the following:


	September 30, 2022								December 31, 2021
	2024 Notes		2025 5.00% Notes		2026 Notes		Notes Payable- Securitization Trusts		2024 Notes		2025 6.85% Notes		2026 Notes		Notes Payable- Securitization Trusts
Principal balance	$	38,250	$	30,000	$	115,000	$	302,253	$	38,250	$	15,000	$	115,000	$	249,750
Unamortized deferred financing costs	(403)		(754)		(2,334)		(4,128)		(571)		(455)		(2,872)		(3,500)
Net carrying amount	$	37,847	$	29,246	$	112,666	$	298,125	$	37,679	$	14,545	$	112,128	$	246,250

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2022

Breakdown of derivatives outstanding

The following is a breakdown of the derivatives outstanding as of September 30, 2022 and December 31, 2021:


	September 30, 2022							December 31, 2021
			Fair Value				Remaining			Fair Value			Remaining
Contract Type	Notional		Asset1		Liability1		Maturity (years)	Notional		Asset1	Liability1		Maturity (years)
5-year Swap Futures	$	—	$	—	$	—	—	$	43,247	—	$	183	0.25

(1) Shown as derivative instruments, at fair value, in the accompanying consolidated balance sheets.

Gains and losses on derivatives


	Three Months Ended								Nine Months Ended
	September 30, 2022				September 30, 2021				September 30, 2022				September 30, 2021
Contract Type	Unrealized Appreciation/(Depreciation)		Realized Gain/(Loss)		Unrealized Appreciation/(Depreciation)		Realized Gain/(Loss)		Unrealized Appreciation/(Depreciation)		Realized Gain/(Loss)		Unrealized Appreciation/(Depreciation)		Realized Gain/(Loss)
5-year Swap Futures	$	—	$	—	$	341	$	(268)	$	183	$	445	$	304	$	(268)

COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Summary of obligations and commitments under operating lease and employment agreements

The following summarizes the Company’s obligations and commitments, as of September 30, 2022 for future minimum cash payments required under operating lease and employment agreements:


Year	Operating Leases		Employment Agreements1		Total
2022	$	472	$	706	$	1,178
2023	1,928		417		2,345
2024	1,981		—		1,981
2025	2,035		—		2,035
2026	1,915		—		1,915
Thereafter	469		—		469
Total	$	8,800	$	1,123	$	9,923

(1) Employment agreements with certain of the Company’s named executive officers

FINANCIAL HIGHLIGHTS (Tables)

9 Months Ended

Sep. 30, 2022

Schedule of financial highlights

The financial highlights for the Company are as follows:



	Nine Months Ended September 30,
	2022			2021
Per share data¹
Net asset value at beginning of period	$	16.72		$	15.45
Net investment (loss) income	(0.04)			1.07
Net realized gain on investments	2.06			1.69
Net realized gain (loss) on derivative transactions	0.02			(0.01)
Net unrealized appreciation (depreciation) on investments	(0.45)			0.33
Net unrealized depreciation on servicing assets	(0.16)			(0.15)
Net unrealized appreciation on derivative transactions	0.01			0.01
Change in deferred taxes	(0.01)			(0.09)
Net increase in net assets resulting from operations	1.43			2.85
Distributions to common stockholders	(2.05)			(2.10)
Stock-based compensation expense	0.06			0.07
Accretive effect of stock offerings (issuing shares above NAV per share)	0.01			0.09



Accretive effect of shares issued in connection with DRIP (issuing shares above NAV per share)	—			0.01
Dilutive effect of purchase of vested stock for employee payroll tax withholding (purchase of shares above NAV)	(0.01)			(0.03)
Dilutive effect of restricted stock awards	(0.14)			(0.14)
Other⁴	0.02			0.03
Net asset value at end of period	$	16.04		$	16.23

Per share market value at end of period	$	16.32		$	27.73
Total return based on market value² ⁷	(33.12)		%	52.06		%
Total return based on change in NAV³ ⁷	8.19		%	18.64		%
Shares outstanding at end of period (in thousands)	24,425			22,559

Ratios/Supplemental Data:
Net assets at end of period	$	391,799		$	366,020
Ratio of expenses to average net assets⁸	21.53		%	21.98		%
Ratio of net investment (loss) income to average net assets⁸	(0.33)		%	8.99		%
Portfolio turnover6	71.18		%	152.77		%
Average debt outstanding	$	504,226		$	470,289
Average debt outstanding per share	$	20.64		$	20.85
Asset coverage ratio⁵	171		%	173		%
Senior securities outstanding	$	553,153		$	500,839

(1) Based on actual number of shares outstanding at the end of the corresponding period or the weighted average shares outstanding for the period, unless otherwise noted, as appropriate.

(3) Total return based on change in NAV is calculated using the change in net asset value plus dividends to stockholders during the period, divided by the beginning net asset value.

(5) Calculated based on the amount of senior securities outstanding at period end.

(7) Not annualized.

(8) Annualized for the nine months ended September 30, 2022. Loss on extinguishment of debt has not been annualized.

STOCK BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Schedule of restricted stock issuances

The following table summarizes the restricted stock issuances under the Equity Incentive Plan, net of shares forfeited, if any, and the remaining shares of restricted stock available for issuance as of September 30, 2022.


Restricted Stock authorized under the plan1						1,500,000
Less net restricted stock (granted)/forfeited during:
Year ended December 31, 2016						(120,933)
Year ended December 31, 2017						(5,007)
Year ended December 31, 2018						(93,568)
Year ended December 31, 2019						(6,285)
Year ended December 31, 2020						2,639
Year ended December 31, 2021						(214,654)
Nine months ended September 30, 2022						(187,914)
Restricted stock available for issuance as of September 30, 2022						874,278

COMMON STOCK (Tables)

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

Schedule of shares sold

The following table summarizes the total shares sold and net proceeds received under the 2020 ATM Equity Distribution Agreement:


	Nine Months Ended September 30, 2022		Year Ended December 31, 2021
Shares sold	36		1,940
Net weighted average price per share	$	21.11	$	25.91
Net proceeds	$	760	$	50,261

EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Schedule of earnings per share

The following table summarizes the calculations for the net increase in net assets resulting from operations per common share for the three and nine months ended September 30, 2022 and 2021:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net increase in net assets resulting from operations	$	11,362	$	16,614	$	34,533	$	64,112
Weighted average shares outstanding	24,299		22,541		24,204		22,468
Net increase in net assets resulting from operations per share	$	0.47	$	0.74	$	1.43	$	2.85

LEASES (Tables)

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Lease cost

The following table summarizes supplemental cash flow and other information related to our operating leases:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)	$	471		$	385		$	1,404		$	1,169
Weighted-average remaining lease term - operating leases	4.41 years			5.6 years			4.41 years			5.6 years
Weighted-average discount rate - operating leases	4.55		%	4.55		%	4.55		%	4.55		%
Total lease costs (included in other general and administrative costs on the consolidated statements of operations)	$	253		236			$	729		$	676

Lessee, operating lease, liability, maturity

The following table represents the maturity of the Company’s operating lease liabilities as of September 30, 2022:


Maturity of Lease Liabilities
2022	472
2023	1,928
2024	1,981
2025	2,035
2026	1,915
Thereafter	469
Total future minimum lease payments	$	8,800
Less: Imputed interest	$	(855)
Present value of future minimum lease payments	$	7,945

DIVIDENDS AND DISTRIBUTIONS (Tables)

9 Months Ended

Sep. 30, 2022

Distribution of assets, liabilities and stockholders' equity

The following table summarizes the Company’s dividend declarations and distributions during the nine months ended September 30, 2022 and 2021.


Date Declared	Record Date	Payment Date	Amount Per Share		Cash Distribution		DRIP Shares Issued	DRIP Shares Value
Nine months ended September 30, 2022
December 20, 2021	March 21, 2022	March 31, 2022	$	0.65	$	15,361	9	$	225
April 20, 2022	June 20, 2022	June 30, 2022	$	0.75	$	17,634	21	$	374
August 30, 2022	September 20, 2022	September 30, 2022	$	0.65	$	15,325	21	$	323


Nine months ended September 30, 2021
February 23, 2021	March 22, 2021	March 31, 2021	$	0.50	$	11,025	6	$	140
May 11, 2021	June 15, 2021	June 30, 2021	$	0.70	$	15,433	6	$	213
August 10, 2021	September 20, 2021	September 30, 2021	$	0.90	$	19,895	10	$	264

Schedule of Investments In and Advances to Affiliates (Tables)

9 Months Ended

Sep. 30, 2022

Investments in and Advances to Affiliates [Abstract]

Investments in and advances to affiliates

Transactions related to our investments with controlled and non-controlled affiliated companies for the nine months ended September 30, 2022 were as follows:


Portfolio Company	Fair Value at December 31, 2021		Purchases (Cost)		Principal Received		Net Realized Gains/(Losses)		Net Unrealized Gains/(Losses)		Fair Value at September 30, 2022		Interest and Other Income		Dividend Income
Controlled Investments
Newtek Merchant Solutions, LLC	$	114,500	$	—	$	—	$	—	$	(3,500)	$	111,000	$	—	$	11,950
Automated Merchant Services, LLC	—		—		—		—		53		53		—		720
Mobil Money, LLC	3,900		—		—		—		3,100		7,000		—		275
Newtek Technology Solutions, Inc.	47,225		400		(225)		—		(6,400)		41,000		837		1,500
banc-serv Partners, LLC	—		—		—		—		—		—		—		—
CDS Business Services, Inc.	7,300		1,900		(1,900)		—		(962)		6,338		835		—
Small Business Lending, LLC	4,400		3,565		—		—		(1,265)		6,700		165		—
Newtek Insurance Agency, LLC	2,300		—		—		—		2,700		5,000		—		—
PMTWorks Payroll, LLC	2,000		3,225		(2,685)		—		960		3,500		328		—
Titanium Asset Management LLC	603		822		(900)		—		(320)		205		426		—
POS on Cloud, LLC	1,300		326		—		—		—		1,626		99		—
Excel WebSolutions, LLC	—		230		(159)		—		(71)		—		69		—
Newtek Conventional Lending, LLC	29,464		250		(9,741)		—		(3,713)		16,260		—		2,019
Newtek Business Lending, LLC	47,406		15,840		—		—		11,000		74,246		—		3,525
Total Controlled Investments	$	260,398	$	26,558	$	(15,610)	$	—	$	1,582	$	272,928	$	2,759	$	19,989

Non-Control Investments
EMCAP Loan Holdings, LLC	$	1,000	$	—	$	—	$	—	$	—	$	1,000	$	—	$	62
Biller Genie Software, LLC	—		360		—		—		—		360		—		—
Total Non-Control Investments	$	1,000	$	360	$	—	$	—	$	—	$	1,360	$	—	$	62

Total Affiliate Investments	$	261,398	$	26,918	$	(15,610)	$	—	$	1,582	$	274,288	$	2,759	$	20,051


Portfolio Company	Investment1			Amount of Realized Gain (Loss)	Amount of Unrealized Appreciation (Depreciation)	Amount of Interest or Dividends Credited to Income3	Fair Value at December 31, 2021	Gross Additions4	Gross Reductions5	Fair Value at September 30, 2022
	Type	Ownership or Interest Rate
Automated Merchant Services, Inc.	Common Stock2	Own	100%	—	53	720	—	53	—	53

CDS Business Services, Inc.	Common Stock2	Own	100%	—	—	—	—	—	—	—
	Line of Credit	Fixed	5.5%	—	(962)	835	7,300	1,900	(2,862)	6,338

Newtek Technology Solutions, Inc.	Common Stock2	Own	100%	—	(6,400)	—	36,000	400	(6,400)	30,000
	Line of Credit	Fixed	10%	—	—	2,334	11,000	—	—	11,000
	Line of Credit6	Prime plus	0.5%	—	—	2	225	—	(225)	—

Newtek Insurance Agency, LLC	Membership Interest2	Own	100%	—	2,700	—	2,300	2,700	—	5,000

PMTWorks Payroll, LLC	Membership Interest2	Own	100%	—	275	—	—	3,585	(85)	3,500
	Term Loans7	Fixed	10%-12%	—	685	328	2,000	685	(2,685)	—

Small Business Lending, LLC	Membership Interest2	Own	100%	—	(1,265)	—	4,000	3,565	(1,265)	6,300
	Term Loan	Fixed	10%	—	—	165	400	—	—	400

banc-serv Partners, LLC	Membership Interest2	Own	100%	—	—	—	—	—	—	—

Newtek Merchant Solutions, LLC	Membership Interest	Own	100%	—	(3,500)	11,950	114,500	—	(3,500)	111,000

Titanium Asset Management, LLC	Membership Interest2	Own	100%	—	(617)	—	—	822	(617)	205
	Term Loan7	Fixed	10%	—	297	426	603	600	(1,203)	—

Newtek Business Lending, LLC	Membership Interest	Own	100%	—	11,000	3,525	47,406	26,840	—	74,246

Newtek Conventional Lending, LLC	Membership Interest	Own	50%	—	(3,713)	2,019	29,464	250	(13,454)	16,260

Mobil Money, LLC	Membership Interest	Own	100%	—	3,100	275	3,900	3,100	—	7,000

POS on Cloud, LLC	Membership Interest2	Own	55.47%	—	—	—	—	326	—	326
	Term Loan	Fixed	10%	—	—	99	1,300	—	—	1,300


Portfolio Company	Investment1			Amount of Realized Gain (Loss)		Amount of Unrealized Appreciation (Depreciation)		Amount of Interest or Dividends Credited to Income3		Fair Value at December 31, 2021		Gross Additions4		Gross Reductions5		Fair Value at September 30, 2022
	Type	Ownership or Interest Rate

Excel WebSolutions LLC	Membership Interest2	Own	100%	—		(230)		—		—		230		(230)		—
	Term Loans2	Fixed	10%	—		159		69		—		159		(159)		—

Total Controlled Investments				$	—	$	1,582	$	22,747	$	260,398	$	45,215	$	(32,685)	$	272,928

Non-Control Investments
EMCAP Loan Holdings, LLC	Membership Interest	Own	4.67%	—		—		62		1,000		—		—		1,000

Biller Genie Software, LLC	Membership Interest	Own	1.82%	—		—		—		—		360		—		360

Total Non-Control Investments				$	—	$	—	$	62	$	1,000	$	360	$	—	$	1,360

Total Affiliate Investments				$	—	$	1,582	$	22,809	$	261,398	$	45,575	$	(32,685)	$	274,288

(1) The principal amount and ownership detail as shown in the Company’s Consolidated Schedule of Investments.

(2) Represents non-income producing security.

(3) Represents the total amount of interest, dividends, and other income credited to income for the period.

(6) Index based floating rate debt investment with interest at rate of Prime plus a contractual spread which typically reset monthly prior to repayment in the second quarter of 2022.

(7) Fixed rate debt investment prior to repayment during the third quarter of 2022.

SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands	Sep. 30, 2022	Jun. 21, 2022	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2020
Accounting Policies [Abstract]
Cash deposits in excess of insured amounts	$ 43,700
Restricted cash	1,408		$ 0	$ 182,913	$ 49,352
Deferred tax liabilities	$ 12,908		$ 12,733
Shares available for repurchase (in shares)		500,000
Common stock, par value (in dollars per share)	$ 0.02	$ 0.02	$ 0.02

SIGNIFICANT ACCOUNTING POLICIES - Cash and Restricted Cash (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2020
Accounting Policies [Abstract]
Cash	$ 3,194	$ 1,845	$ 20,193	$ 2,073
Restricted cash	1,408	0	182,913	49,352
Cash and restricted cash	$ 82,132	$ 186,860	$ 203,106	$ 51,425

INVESTMENTS - Investment Portfolio (Details) - USD ($)

Sep. 30, 2022

Dec. 31, 2021

$ 79,627,000

$ 84,824,000

Data Processing, Hosting, and Related Services

61,083,000

59,552,000

Securities, Commodity Contracts, and Other Financial Investments and Related Activities

164,722,000

169,043,000

88,769,000

69,473,000

Food Services and Drinking Places

88,628,000

60,553,000

48,101,000

48,782,000

Specialty Trade Contractors

49,595,000

51,840,000

37,271,000

25,250,000

Professional, Scientific, and Technical Services

35,165,000

24,745,000

35,799,000

27,374,000

Amusement, Gambling, and Recreation Industries

34,338,000

27,213,000

27,886,000

28,806,000

Ambulatory Health Care Services

29,565,000

29,578,000

27,902,000

23,078,000

Administrative and Support Services

26,265,000

21,483,000

22,869,000

25,320,000

21,908,000

25,036,000

Truck Transportation

24,437,000

24,929,000

Merchant Wholesalers, Durable Goods

20,685,000

21,937,000

19,212,000

14,725,000

19,362,000

15,107,000

Repair and Maintenance

16,536,000

18,301,000

Merchant Wholesalers, Nondurable Goods

16,924,000

18,752,000

17,589,000

12,649,000

Personal and Laundry Services

16,877,000

12,115,000

12,415,000

11,218,000

Fabricated Metal Product Manufacturing

12,945,000

11,935,000

12,407,000

15,138,000

Construction of Buildings

12,827,000

16,104,000

11,358,000

6,404,000

10,588,000

5,909,000

Social Assistance

9,100,000

12,967,000

9,791,000

14,401,000

Accommodation

10,684,000

13,795,000

Support Activities for Mining

9,691,000

13,529,000

10,543,000

12,760,000

Rental and Leasing Services

9,623,000

11,427,000

8,910,000

8,529,000

Motor Vehicle and Parts Dealers

9,080,000

8,505,000

9,116,000

12,435,000

Nursing and Residential Care Facilities

9,066,000

13,016,000

8,194,000

4,781,000

Transportation Equipment Manufacturing

8,837,000

5,206,000

7,697,000

9,599,000

Building Material and Garden Equipment and Supplies Dealers

8,044,000

10,461,000

7,637,000

6,504,000

7,990,000

6,845,000

Food Manufacturing

9,484,000

12,760,000

7,823,000

11,427,000

NCL (Joint Venture)

17,412,000

26,903,000

16,260,000

29,464,000

Other

131,234,000

123,955,000

129,014,000

123,154,000

Equity Securities

118,125,000

93,717,000

Joint Venture Equity Securities

237,630,000

208,106,000

17,412,000

26,903,000

16,260,000

29,464,000

Debt Securities

32,700,000

36,669,000

19,038,000

22,828,000

502,400,100

^[1],[2],[3]

431,970,000

^[4],[5]

Unguaranteed Investments | Accrual

488,375,900

^[1],[2],[3]

424,416,900

^[4],[5]

443,542,400

^[1],[6]

377,844,500

^[7]

Unguaranteed Investments | Non-Accrual

457,261,400

^[1],[6]

393,910,100

^[7]

58,857,700

^[1],[3],[8]

54,125,500

^[9],[10]

31,114,500

^[1],[3],[8]

30,506,800

^[9],[10]

21,648,100

65,728,300

Guaranteed Investments | Accrual

22,949,400

72,970,300

16,802,100

^[11]

61,474,100

^[12]

Guaranteed Investments | Non-Accrual

18,103,000

^[11]

68,716,100

^[12]

4,846,000

^[13]

4,254,200

^[14]

Guaranteed SBA 7(a) Loan | Accrual

4,846,400

^[13]

4,254,200

^[14]

16,727,000

60,610,000

Guaranteed PPP Loan | Accrual

18,028,000

67,852,000

75,000

864,000

$ 75,000

$ 864,000

[1]	All of the Company’s investments are in entities which are organized under the Laws of the United States and have a principal place of business in the United States.
[2]	Fair value determined using significant unobservable inputs.
[3]	Newtek values non-accrual SBA 7(a) loans using a discounted cash flow analysis of the underlying collateral which supports the loan. Management’s estimate of the net recovery of collateral, (fair value less cost to liquidate) is applied to the discounted cash flow analysis based upon a time to liquidate estimate. Modified loans are valued based upon current payment streams and are re-amortized at the end of the modification period.
[4]	All of the Company’s investments are in entities which are organized under the Laws of the United States and have a principal place of business in the United States.
[5]	Fair value determined using significant unobservable inputs.
[6]	Newtek values each unguaranteed portion of SBA 7(a) accrual loans (“Loan”) using a discounted cash flow analysis which projects future cash flows and incorporates projections for Loan pre-payments and Loan defaults using historical portfolio data. The data predicts future prepayment and default probability on curves which are based on Loan age. The recovery assumption for each Loan is specific to the discounted valuation of the collateral supporting that Loan. Each Loan’s cash flow is discounted at a rate which approximates a market yield. The Loans were originated under the SBA 7(a) program and conform to the underwriting guidelines in effect at their time of origination. Newtek has been awarded PLP status from the SBA. Portions of these Loans are not guaranteed by the SBA. Individual loan participations can be sold to institutions which have been granted an SBA 750 license. Loans can also be sold as a pool of loans in a security form to qualified investors.
[7]	Newtek values each unguaranteed portion of SBA 7(a) accrual loans (“Loan”) using a discounted cash flow analysis which projects future cash flows and incorporates projections for Loan pre-payments and Loan defaults using historical portfolio data. The data predicts future prepayment and default probability on curves which are based on Loan age. The recovery assumption for each Loan is specific to the discounted valuation of the collateral supporting that Loan. Each Loan’s cash flow is discounted at a rate which approximates a market yield. The Loans were originated under the SBA 7(a) program and conform to the underwriting guidelines in effect at their time of origination. Newtek has been awarded PLP status from the SBA. Portions of these Loans are not guaranteed by the SBA. Individual loan participations can be sold to institutions which have been granted an SBA 750 license. Loans can also be sold as a pool of loans in a security form to qualified investors.
[8]	Non-income producing security.
[9]	Newtek values non-accrual SBA 7(a) loans using a discounted cash flow analysis of the underlying collateral which supports the loan. Management’s estimate of the net recovery of collateral, (fair value less cost to liquidate) is applied to the discounted cash flow analysis based upon a time to liquidate estimate. Modified loans are valued based upon current payment streams and are re-amortized at the end of the modification period.
[10]	Non-income producing security.
[11]	Newtek values guaranteed accrual SBA 7(a) loans using the secondary SBA 7(a) market as a reference point. Newtek routinely sells accrual SBA 7(a) loans into this secondary market. Guaranteed portions of SBA 7(a) loans partially funded as of the valuation date are valued using level two inputs as disclosed in NOTE 6—FAIR VALUE MEASUREMENTS.
[12]	Newtek values guaranteed accrual SBA 7(a) loans using the secondary SBA 7(a) market as a reference point. Newtek routinely sells accrual SBA 7(a) loans into this secondary market. Guaranteed portions of SBA 7(a) loans partially funded as of the valuation date are valued using level two inputs as disclosed in NOTE 6—FAIR VALUE MEASUREMENTS.
[13]	Newtek values guaranteed non-accrual loans based on the estimated recovery under the SBA guarantee, which is at cost.
[14]	Newtek values guaranteed non-accrual loans based on the estimated recovery under the SBA guarantee, which is at cost.

INVESTMENTS - Narrative (Details) $ in Millions	Sep. 30, 2022	Jan. 28, 2022 USD ($)	Jul. 31, 2021 USD ($) loan	May 20, 2019
Summary of Investment Holdings [Line Items]
Investment sale		$ 56.3
Yield percentage		3.209%
PPP
Summary of Investment Holdings [Line Items]
Number of PPP loans \| loan			26,200
Loans			$ 1,900.0
Participating interest in loans, percentage held by third party	90.00%
Newtek Conventional Lending, LLC \| Newtek Commercial Lending
Summary of Investment Holdings [Line Items]
Joint venture ownership percentage				50.00%
Newtek Conventional Lending, LLC \| Conventional Lending TCP Holding
Summary of Investment Holdings [Line Items]
Joint venture ownership percentage				50.00%

INVESTMENTS - NCLs Individual Investments (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Summary of Investment Holdings [Line Items]
Principal	$ 556,748,200	$ 534,532,500
Cost	79,627,000	84,824,000
Fair Value	0	0
Newtek Conventional Lending, LLC
Summary of Investment Holdings [Line Items]
Principal	81,379,000	86,637,000
Cost	79,627,000	84,824,000
Fair Value	$ 79,093,000	$ 89,126,000

INVESTMENTS - Joint Venture Summarized Financial Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Investment Company, Income and Expense [Abstract]
Interest and other income	$ 1,744	$ 1,558	$ 5,258	$ 4,614
Total expenses	1,410	1,028	5,150	3,952
Income from operations	2,244	1,607	3,788	4,088
Net unrealized (depreciation) appreciation on investments	7,000	4,500	159	5,870
Net increase in net assets resulting from operations	$ (1,771)	$ 507	$ (1,789)	$ 1,870

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTY TRANSACTIONS - Investments with Affiliates (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Investments in and Advances to Affiliates, at Fair Value [Roll Forward]
Fair Value			$ 0
Net Realized Gains/(Losses)			0	$ 31,919,000
Net Unrealized Gains/(Losses)	$ 7,000,000	$ 4,500,000	159,000	5,870,000
Fair Value	0		0
Interest and Other Income			2,759,000
Dividend Income	$ 7,205,000	$ 0	$ 20,051,000	$ 51,000

TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Related Party Transaction [Line Items]
Outstanding borrowings		$ 150		$ 150		$ 11,450
Due from related parties		947		947		4,395
Due to related parties		1,800		1,800		1,500
Related Party Notes Payable \| Line of Credit
Related Party Transaction [Line Items]
Maximum borrowing capacity	$ 50,000	50,000		$ 50,000		$ 50,000
Related Party Notes Payable \| Line of Credit \| London Interbank Offered Rate (LIBOR)
Related Party Transaction [Line Items]
Interest rate, basis spread	2.50%
Related Party Notes Payable \| Line of Credit \| Prime Rate
Related Party Transaction [Line Items]
Interest rate, basis spread	1.50%
Related Party RLOC
Related Party Transaction [Line Items]
Interest rate				4.78%
Outstanding borrowings		200		$ 200
Interest expense		$ 100	$ 100	$ 300	$ 300

TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTY TRANSACTIONS - Expenses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Related Party Transaction [Line Items]
Expenses incurred from controlled portfolio companies	$ 3,959	$ 3,741	$ 11,273	$ 12,397
Managed technology services
Related Party Transaction [Line Items]
Expenses incurred from controlled portfolio companies	65	532	1,107	1,475
Origination and loan processing
Related Party Transaction [Line Items]
Expenses incurred from controlled portfolio companies	3,884	3,187	10,140	10,856
Loan servicing
Related Party Transaction [Line Items]
Expenses incurred from controlled portfolio companies	0	14	0	41
Payroll processing fees
Related Party Transaction [Line Items]
Expenses incurred from controlled portfolio companies	$ 10	$ 8	$ 26	$ 25

TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTY TRANSACTIONS - Sublease Income (Details) - Sublease income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Related Party Transaction [Line Items]
Revenue from related parties	$ 200	$ 185	$ 622	$ 552
Newtek Merchant Solutions, LLC
Related Party Transaction [Line Items]
Revenue from related parties	69	63	220	187
Newtek Technology Solutions, Inc.
Related Party Transaction [Line Items]
Revenue from related parties	2	2	8	8
Small Business Lending, LLC
Related Party Transaction [Line Items]
Revenue from related parties	97	80	286	230
Newtek Insurance Agency, LLC
Related Party Transaction [Line Items]
Revenue from related parties	11	17	42	52
CDS Business Services, Inc.
Related Party Transaction [Line Items]
Revenue from related parties	17	18	54	56
PMTWorks Payroll, LLC
Related Party Transaction [Line Items]
Revenue from related parties	2	3	6	14
Newtek Business Lending, LLC
Related Party Transaction [Line Items]
Revenue from related parties	$ 2	$ 2	$ 6	$ 5

TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTY TRANSACTIONS - Managerial Assistance Fees (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Related Party Transaction [Line Items]
Revenue from related parties	$ 612	$ 538	$ 1,758	$ 1,596
Newtek Merchant Solutions, LLC
Related Party Transaction [Line Items]
Revenue from related parties	121	106	358	338
Newtek Technology Solutions, Inc.
Related Party Transaction [Line Items]
Revenue from related parties	103	107	309	358
PMTWorks Payroll, LLC
Related Party Transaction [Line Items]
Revenue from related parties	31	23	80	65
Newtek Insurance Agency, LLC
Related Party Transaction [Line Items]
Revenue from related parties	48	32	118	95
Newtek Conventional Lending, LLC
Related Party Transaction [Line Items]
Revenue from related parties	3	5	12	5
POS on Cloud, LLC
Related Party Transaction [Line Items]
Revenue from related parties	4	0	4	0
CDS Business Services, Inc.
Related Party Transaction [Line Items]
Revenue from related parties	81	64	228	148
Mobil Money, LLC
Related Party Transaction [Line Items]
Revenue from related parties	23	28	66	86
Newtek Business Lending, LLC
Related Party Transaction [Line Items]
Revenue from related parties	56	43	161	119
Small Business Lending, LLC
Related Party Transaction [Line Items]
Revenue from related parties	$ 142	$ 130	$ 422	$ 382

SERVICING ASSETS - Fair Value and Valuation Assumptions (Details) $ in Thousands	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Servicing Assets at Fair Value [Line Items]
Servicing assets at fair value	$ 33,530	$ 28,008
Weighted Average \| Discount factor
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.1260	0.1260
Weighted Average \| Cumulative prepayment rate
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.2500	0.2500
Weighted Average \| Average cumulative default rate
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.2500	0.2500
Minimum \| Discount factor
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.1260	0.1260
Minimum \| Cumulative prepayment rate
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.2500	0.2500
Minimum \| Average cumulative default rate
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.2500	0.2500
Maximum \| Discount factor
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.1260	0.1260
Maximum \| Cumulative prepayment rate
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.2500	0.2500
Maximum \| Average cumulative default rate
Servicing Assets at Fair Value [Line Items]
Servicing assets, measurement input	0.2500	0.2500

SERVICING ASSETS - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Servicing Assets at Fair Value [Line Items]
Servicing fee income	$ 3,575	$ 2,819	$ 9,931	$ 8,346

FAIR VALUE MEASUREMENTS - Fair Value Levels (Details) - USD ($)

Sep. 30, 2022

Dec. 31, 2021

$ 0

2,315,000

2,354,000

33,530,000

28,008,000

837,718,000

789,147,000

183,000

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

488,375,900

^[1],[2],[3]

424,416,900

^[4],[5]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

22,949,400

72,970,300

Level 1, 2 and 3

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

230,934,000

Level 1

Level 1 | Unguaranteed Investments

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Level 1 | Guaranteed Investments

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Level 2

22,949,000

72,970,000

Level 2 | Unguaranteed Investments

183,000

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Level 2 | Guaranteed Investments

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

22,949,000

72,970,000

Level 3

1,360,000

1,000,000

2,315,000

2,354,000

33,530,000

28,008,000

782,249,000

686,713,000

Level 3 | Unguaranteed Investments

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Level 3 | Guaranteed Investments

488,376,000

424,417,000

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

NAV

$ 16,260,000

$ 29,464,000

[1]	All of the Company’s investments are in entities which are organized under the Laws of the United States and have a principal place of business in the United States.
[2]	Fair value determined using significant unobservable inputs.
[3]	Newtek values non-accrual SBA 7(a) loans using a discounted cash flow analysis of the underlying collateral which supports the loan. Management’s estimate of the net recovery of collateral, (fair value less cost to liquidate) is applied to the discounted cash flow analysis based upon a time to liquidate estimate. Modified loans are valued based upon current payment streams and are re-amortized at the end of the modification period.
[4]	All of the Company’s investments are in entities which are organized under the Laws of the United States and have a principal place of business in the United States.
[5]	Fair value determined using significant unobservable inputs.

FAIR VALUE MEASUREMENTS - Narrative (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Servicing assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gain (loss) included in earnings	$ (3,964)
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gain (loss) included in earnings	5,300
Level 3 \| Servicing assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gain (loss) included in earnings	(4,000)
Level 3 \| Unguaranteed Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gain (loss) included in earnings	$ (6,500)

FAIR VALUE MEASUREMENTS - Level III Rollforward (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
SBA investment
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning balance	$ 424,417	$ 407,748
SBA unguaranteed non-affiliate investments, funded	142,974	48,473
Purchases		6,945
Sales	(1,646)	(1,654)
Settlements	(63,365)	(50,217)
Fair value, ending balance	488,377	406,581
SBA investment \| Debt and Equity Securities, Unrealized Gain (Loss)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Gain (loss) included in earnings	(6,473)	2,583
SBA investment \| Debt and Equity Securities, Realized Gain (Loss)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Gain (loss) included in earnings	(8,131)	(7,297)
Investments
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning balance	1,000	6,447
Gain (loss) included in earnings	5,295	521
Purchases	360	36,940
Settlements	(5,870)	(47)
Fair value, ending balance	1,360	6,921
Servicing assets
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning balance	28,008	26,061
Gain (loss) included in earnings	(3,964)
Purchases	9,486	6,160
Fair value, ending balance	33,530	28,899
Servicing assets \| Changes In Valuation Inputs or Adjustments
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Gain (loss) included in earnings		(2,440)
Servicing assets \| Factors Other Than Changes in Valuation Inputs Or Adjustments
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Gain (loss) included in earnings		(882)
Other Real Estate Owned
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning balance	2,354	2,717
Purchases	1,646	1,654
Sales	(1,308)	(1,281)
Fair value, ending balance	2,315	2,738
Other Real Estate Owned \| Debt and Equity Securities, Unrealized Gain (Loss)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Gain (loss) included in earnings	(172)	(73)
Other Real Estate Owned \| Debt and Equity Securities, Realized Gain (Loss)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Gain (loss) included in earnings	$ (205)	$ (279)

BORROWINGS - Long-term Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2022	May 02, 2022	Mar. 31, 2022	Dec. 31, 2021	Jun. 30, 2015
Debt Instrument [Line Items]
Total	$ 685,503			$ 618,000
Borrowings Outstanding	$ 545,534			$ 472,052
Weighted Average Interest Rate	5.00%			3.38%
Line of Credit \| Capital One Facilities \| Capital One, Guaranteed and Unguaranteed
Debt Instrument [Line Items]
Commitments - line of credit	$ 150,000			$ 150,000
Line of Credit \| Capital One Facilities \| Capital One, Guaranteed
Debt Instrument [Line Items]
Commitments - line of credit	150,000			150,000
Borrowings Outstanding - line of credit	$ 67,500			$ 50,000
Weighted Average Interest Rate	5.50%			2.50%
Line of Credit \| Capital One Facilities \| Capital One, Unguaranteed
Debt Instrument [Line Items]
Commitments - line of credit	$ 0			$ 0
Borrowings Outstanding - line of credit	$ 0			$ 0
Weighted Average Interest Rate	5.00%			3.50%
Line of Credit \| Related Party Notes Payable
Debt Instrument [Line Items]
Commitments - line of credit	$ 50,000			$ 50,000	$ 50,000
Borrowings Outstanding - line of credit	$ 150			$ 11,450
Weighted Average Interest Rate	4.78%			2.60%
Medium-term Notes \| 2024 Notes
Debt Instrument [Line Items]
Commitments - Notes	$ 38,250			$ 38,250
Borrowings Outstanding	$ 37,847			$ 37,679
Weighted Average Interest Rate	5.75%			5.75%
Medium-term Notes \| 2025 6.85% Notes
Debt Instrument [Line Items]
Commitments - Notes	$ 0		$ 15,000	$ 15,000
Borrowings Outstanding	$ 0			$ 14,545
Weighted Average Interest Rate	0.00%			6.85%
Interest rate	6.85%		6.85%	6.85%
Medium-term Notes \| 2025 5.00% Notes
Debt Instrument [Line Items]
Commitments - Notes	$ 30,000	$ 15,000	$ 15,000	$ 0
Borrowings Outstanding	$ 29,246			$ 0
Weighted Average Interest Rate	5.00%			0.00%
Interest rate	5.00%	5.00%	5.00%
Medium-term Notes \| 2026 Notes
Debt Instrument [Line Items]
Commitments - Notes	$ 115,000			$ 115,000
Borrowings Outstanding	$ 112,666			$ 112,128
Weighted Average Interest Rate	5.50%			5.50%
Secured Debt \| Securitization Trusts
Debt Instrument [Line Items]
Commitments - Notes	$ 302,253			$ 249,750
Borrowings Outstanding	$ 298,125			$ 246,250
Weighted Average Interest Rate	4.61%			2.05%

BORROWINGS - Narrative (Details) $ in Millions	9 Months Ended
BORROWINGS - Narrative (Details) $ in Millions	Sep. 30, 2022 USD ($) $ / shares	Sep. 30, 2021 USD ($)	Dec. 31, 2021 USD ($) $ / shares	Jul. 26, 2018	Jul. 25, 2018
Debt Instrument [Line Items]
Required asset coverage ratio				150.00%	200.00%
Asset coverage ratio	171.00%
Interest expense	$ 17.4	$ 15.2
2026 Notes \| Medium-term Notes
Debt Instrument [Line Items]
Closing price	$ 111.4		$ 118.5
2026 Notes \| Medium-term Notes \| Measurement Input, Share Price
Debt Instrument [Line Items]
Closing price (in dollars per share) \| $ / shares	24.22		25.77
2024 Notes \| Medium-term Notes
Debt Instrument [Line Items]
Closing price	$ 38.0		$ 38.9
2024 Notes \| Medium-term Notes \| Measurement Input, Share Price
Debt Instrument [Line Items]
Closing price (in dollars per share) \| $ / shares	24.81		25.40

BORROWINGS - Outstanding Borrowings (Details) - USD ($) $ in Thousands	Sep. 30, 2022	May 02, 2022	Mar. 31, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Net carrying amount	$ 545,534			$ 472,052
2024 Notes \| Medium-term Notes
Debt Instrument [Line Items]
Commitments - Notes	38,250			38,250
Unamortized deferred financing costs	(403)			(571)
Net carrying amount	37,847			37,679
2025 5.00% Notes \| Medium-term Notes
Debt Instrument [Line Items]
Commitments - Notes	30,000	$ 15,000	$ 15,000	0
Unamortized deferred financing costs	(754)
Net carrying amount	$ 29,246			0
Interest rate	5.00%	5.00%	5.00%
2025 6.85% Notes \| Medium-term Notes
Debt Instrument [Line Items]
Commitments - Notes	$ 0		$ 15,000	15,000
Unamortized deferred financing costs				(455)
Net carrying amount	$ 0			$ 14,545
Interest rate	6.85%		6.85%	6.85%
2026 Notes \| Medium-term Notes
Debt Instrument [Line Items]
Commitments - Notes	$ 115,000			$ 115,000
Unamortized deferred financing costs	(2,334)			(2,872)
Net carrying amount	112,666			112,128
Securitization Trusts \| Secured Debt
Debt Instrument [Line Items]
Commitments - Notes	302,253			249,750
Unamortized deferred financing costs	(4,128)			(3,500)
Net carrying amount	$ 298,125			$ 246,250

DERIVATIVE INSTRUMENTS - Derivatives Outstanding (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Sep. 30, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Notional	$ 43,247	$ 0
Asset	0	0
Liability	$ 183	$ 0
Remaining Maturity	3 months

DERIVATIVE INSTRUMENTS - Gains and Losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Unrealized Appreciation/(Depreciation)	$ 1,216	$ 153	$ 1,277	$ 266
Realized Gain/(Loss)	$ 697	$ (38)	$ 1,771	$ (38)

COMMITMENTS AND CONTINGENCIES - Obligations and Commitments Under Operating Lease and Employment Agreements (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Operating Leases
2022	$ 472
2023	1,928
2024	1,981
2025	2,035
2026	1,915
Thereafter	469
Total	8,800
Employment Agreement, To Be Paid [Abstract]
2022	706
2023	417
2024	0
2025	0
2026	0
Thereafter	0
Total	1,123
Total
2022	1,178
2023	2,345
2024	1,981
2025	2,035
2026	1,915
Thereafter	469
Total	$ 9,923

COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended		37 Months Ended
	Jan. 31, 2022	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Jun. 30, 2019	Dec. 31, 2021	Jun. 30, 2016
Other Commitments [Line Items]
Principal		$ 556,748,200		$ 556,748,200			$ 534,532,500
Net unrealized (depreciation) appreciation on investments		7,000,000	$ 4,500,000	159,000	$ 5,870,000
Fair value		0		0			0
Collateralized deposit		98,045,000		98,045,000			$ 79,788,000
Commitments to Extend Credit
Other Commitments [Line Items]
Commitment		15,300,000		15,300,000
BSP
Other Commitments [Line Items]
Principal								$ 5,400,000
Additional capital investment						$ 1,700,000
Net unrealized (depreciation) appreciation on investments						(7,100,000)
Fair value						$ 0
Receivable And Inventory Facility \| Line of Credit \| Payment guarantee
Other Commitments [Line Items]
Guaranty liabilities		10,300,000		10,300,000
Receivable And Inventory Facility \| Line of Credit \| Payment guarantee \| Asset Pledged as Collateral
Other Commitments [Line Items]
Collateralized deposit		750,000		750,000
NBL Capital One Facility \| Line of Credit \| Payment guarantee
Other Commitments [Line Items]
Guaranty liabilities		23,000,000		23,000,000
NBL Deutsche Bank Facility \| Line of Credit \| Payment guarantee
Other Commitments [Line Items]
Guaranty liabilities		0		0
NBL One Florida Bank Facility \| Line of Credit \| Payment guarantee
Other Commitments [Line Items]
Guaranty liabilities		14,100,000		14,100,000
Webster Facility \| Line of Credit \| Payment guarantee
Other Commitments [Line Items]
Guaranty liabilities		21,900,000		21,900,000
BSP
Other Commitments [Line Items]
Non-dischargeable judgement amount	$ 6,200,000
Newtek Business Credit Solutions \| Receivable And Inventory Facility \| Line of Credit
Other Commitments [Line Items]
Maximum borrowing capacity		12,000,000		12,000,000
Newtek Business Lending, LLC \| NBL Capital One Facility \| Line of Credit
Other Commitments [Line Items]
Maximum borrowing capacity		75,000,000		75,000,000
Accordion feature, increase limit		150,000,000		150,000,000
Newtek Business Lending, LLC \| NBL Deutsche Bank Facility \| Line of Credit
Other Commitments [Line Items]
Maximum borrowing capacity		100,000,000		100,000,000
Newtek Business Lending, LLC \| NBL One Florida Bank Facility \| Line of Credit
Other Commitments [Line Items]
Maximum borrowing capacity		20,000,000		20,000,000
Newtek Merchant Solutions, LLC \| Webster Facility \| Line of Credit
Other Commitments [Line Items]
Maximum borrowing capacity		$ 50,000,000		$ 50,000,000

FINANCIAL HIGHLIGHTS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands							3 Months Ended		9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Dec. 31, 2020
Investment Company, Financial Highlights [Roll Forward]
Net asset value at beginning of period (in dollars per share)									$ 16.72	$ 15.45
Net investment (loss) income per share (in dollars per share)							$ 0.01	$ (0.30)	(0.04)	1.07
Net realized gain on investments (in dollars per share)									2.06	1.69
Net realized gain on derivative transactions (in dollars per share)									0.02	(0.01)
Net unrealized depreciation on investments (in dollars per share)									(0.45)	0.33
Net unrealized depreciation on servicing assets (in dollars per share)									(0.16)	(0.15)
Net unrealized appreciation on derivative transactions (in dollars per share)									0.01	0.01
Change in deferred taxes (in dollars per share)									(0.01)	(0.09)
Net increase in net assets resulting from operations (in dollars per share)									1.43	2.85
Distributions to common stockholders (in dollars per share)	$ (0.65)	$ (0.75)	$ (0.65)	$ (0.90)	$ (0.70)	$ (0.50)	(0.65)	(0.90)	(2.05)	(2.10)
Stock-based compensation expense (in dollars per share)									0.06	0.07
Accretive effect of stock offerings (issuing shares above NAV per share) (in dollars per share)									0.01	0.09
Accretive effect of shares issued in connection with DRIP (issuing shares above NAV per share) (in dollars per share)									0	0.01
Dilutive effect of purchase of vested stock for employee payroll tax withholding (purchase of shares above NAV) (in dollars per share)									(0.01)	(0.03)
Dilutive effect of restricted stock awards (in dollars per share)									(0.14)	(0.14)
Other (in dollars per share)									0.02	0.03
Net asset value at end of period (in dollars per share)	$ 16.04			$ 16.23			$ 16.04	$ 16.23	$ 16.04	$ 16.23
Total return based on change in NAV									8.19%	18.64%
Common shares outstanding at end of period (in shares)	24,425			22,559			24,425	22,559	24,425	22,559	24,159
Ratios/Supplemental Data:
Net assets at end of period	$ 32,519	$ 394,532		$ 366,020	$ 369,002		$ 32,519	$ 366,020	$ 32,519	$ 366,020	$ 58,928	$ 339,353
Ratio of expenses to average net assets									21.53%	21.98%
Ratio of net investment (loss) income to average net assets									(0.33%)	8.99%
Average debt outstanding									$ 504,226	$ 470,289
Average debt outstanding per share (in dollars per share)									$ 20.64	$ 20.85
Senior securities outstanding	$ 553,153			$ 500,839			$ 553,153	$ 500,839	$ 553,153	$ 500,839

STOCK BASED COMPENSATION - Restricted Stock Activity (Details) - shares	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares authorized (in shares)	3,000,000
Restricted Stock
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares authorized (in shares)	1,500,000
Net restricted stock (granted)/forfeited (in shares)	(187,914)	(214,654)	2,639	(6,285)	(93,568)	(5,007)	(120,933)
Shares available for issuance (in shares)	874,278
Percentage of common stock issued and outstanding available for restricted stock issuance under plan	20.00%
Percentage of shares allowed to be restricted stock	50.00%

STOCK BASED COMPENSATION - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation expense	$ 0.6	$ 0.3	$ 1.8	$ 1.5
Restricted Stock
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Unrecognized compensation expense	$ 5.5		$ 5.5
Remaining weighed-average period			2 years 2 months 12 days
Restricted Stock \| Minimum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting period			1 year
Restricted Stock \| Maximum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting period			3 years

COMMON STOCK - Narrative (Details) - $ / shares	Nov. 07, 2022	Sep. 30, 2022	Jul. 20, 2022	Jun. 21, 2022	Dec. 31, 2021
Subsidiary, Sale of Stock [Line Items]
Shares available for repurchase (in shares)				500,000
Common stock, par value (in dollars per share)		$ 0.02		$ 0.02	$ 0.02
2020 ATM Equity Distribution
Subsidiary, Sale of Stock [Line Items]
Common stock authorized for sale (in shares)			6,400,000
2020 ATM Equity Distribution \| Subsequent Event
Subsidiary, Sale of Stock [Line Items]
Common stock available for sale (in shares)	3,401,661

COMMON STOCK - ATM Equity Distribution (Details) - 2020 ATM Equity Distribution - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Subsidiary, Sale of Stock [Line Items]
Shares sold (in shares)	36,000	1,940,000
Net weighted average price per share (in dollars per share)	$ 21.11	$ 25.91
Net proceeds	$ 760	$ 50,261

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Earnings Per Share [Abstract]
Net increase in net assets resulting from operations	$ (1,771)	$ 507	$ (1,789)	$ 1,870
Weighted average number of shares outstanding (in shares)	24,299,000	22,541,000	24,204,000	22,468,000
Net increase in net assets resulting from operations per share (in dollars per share)	$ 0.47	$ 0.74	$ 1.43	$ 2.85

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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-Subparagraph (d)
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The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

LEASES - Narrative (Details)	Sep. 30, 2022
Leases [Abstract]
Remaining contractual term	5 years
Renewal term	10 years

LEASES - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
LEASES - Lease Cost (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Leases [Abstract]
Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)	$ 471	$ 385	$ 1,404	$ 1,169
Weighted-average remaining lease term - operating leases	4 years 4 months 28 days	5 years 7 months 6 days	4 years 4 months 28 days	5 years 7 months 6 days
Weighted-average discount rate - operating leases	4.55%	4.55%	4.55%	4.55%
Total lease costs (included in other general and administrative costs on the consolidated statements of operations)	$ 253	$ 236	$ 729	$ 676

LEASES - Operating Lease Liability Maturity (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Leases [Abstract]
2022	$ 472
2023	1,928
2024	1,981
2025	2,035
2026	1,915
Thereafter	469
Total	8,800
Less: Imputed interest	(855)
Present value of future minimum lease payments	$ 7,945	$ 9,056

DIVIDENDS AND DISTRIBUTIONS (Details) - USD ($) $ / shares in Units, $ in Thousands							3 Months Ended		9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Distribution of Assets, Liabilities and Stockholders' Equity [Line Items]
Amount Per Share	$ 0.65	$ 0.75	$ 0.65	$ 0.90	$ 0.70	$ 0.50	$ 0.65	$ 0.90	$ 2.05	$ 2.10
Cash Distribution	$ 15,325	$ 17,634	$ 15,361	$ 19,895	$ 15,433	$ 11,025	$ 15,648	$ 20,159	$ 49,241	$ 46,971
DRIP Shares Issued	21,000	21,000	9,000	10,000	6,000	6,000	20,000	10,000	50,000	22,000
DRIP Shares Value	$ 323	$ 374	$ 225	$ 264	$ 213	$ 140	$ 324	$ 264	$ 922	$ 618
Restricted Stock
Distribution of Assets, Liabilities and Stockholders' Equity [Line Items]
DRIP Shares Issued									21,700	7,600
DRIP Shares Value									$ 400	$ 200

SUPPLEMENTAL FINANCIAL DATA (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Investment Company, Income and Expense [Abstract]
Total investment income	$ 3,654	$ 2,635	$ 8,938	$ 8,040
Total expenses	1,410	1,028	5,150	3,952
Net investment (loss) income	2,244	1,607	3,788	4,088
Interest expense, net	(788)	(566)	(815)	(913)
Operating income	857	1,409	2,973	3,175
Net unrealized (depreciation) appreciation on loans receivable - held for sale, at fair value	(1,345)	150	(1,373)	(132)
Net realized gain (loss) on derivative transactions	697	(38)	1,771	(38)
Net unrealized appreciation on derivative transactions	1,216	153	1,277	266
Income before tax	$ 1,425	$ 1,674	$ 4,648	$ 3,271

Schedule of Investments In and Advances to Affiliates (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Investments in and Advances to Affiliates [Line Items]
Ownership or Interest Rate	1.82%		1.82%
Net Realized Gains/(Losses)			$ 0	$ 31,919,000
Net Unrealized Gains/(Losses)	$ 7,000,000	$ 4,500,000	159,000	$ 5,870,000
Amount of Interest or Dividends Credited to Income			22,809,000
Investments in and Advances to Affiliates, at Fair Value [Roll Forward]
Fair Value			0
Gross Additions			45,575,000
Gross Reductions			(32,685,000)
Fair Value	$ 0		$ 0

Label	Element	Value
Assets, Noncurrent	us-gaap_AssetsNoncurrent	$ 20,076,000
Assets, Noncurrent	us-gaap_AssetsNoncurrent	27,200,000
Assets, Noncurrent	us-gaap_AssetsNoncurrent	1,146,000
Assets, Noncurrent	us-gaap_AssetsNoncurrent	2,012,000
Investment Income, Dividend	us-gaap_InvestmentIncomeDividend	4,350,000
Investment Income, Dividend	us-gaap_InvestmentIncomeDividend	0
Investment Income, Dividend	us-gaap_InvestmentIncomeDividend	11,950,000
Investment Income, Dividend	us-gaap_InvestmentIncomeDividend	0
Investment Income, Dividend	us-gaap_InvestmentIncomeDividend	1,650,000
Investment Income, Dividend	us-gaap_InvestmentIncomeDividend	0
Investment Income, Dividend	us-gaap_InvestmentIncomeDividend	3,525,000
Investment Income, Dividend	us-gaap_InvestmentIncomeDividend	0
Members' Equity	us-gaap_MembersEquity	7,624,000
Members' Equity	us-gaap_MembersEquity	7,921,000
Members' Equity	us-gaap_MembersEquity	51,802,000
Members' Equity	us-gaap_MembersEquity	36,155,000
Other Liabilities	us-gaap_OtherLiabilities	1,126,000
Other Liabilities	us-gaap_OtherLiabilities	296,000
Liabilities, Current	us-gaap_LiabilitiesCurrent	9,721,000
Liabilities, Current	us-gaap_LiabilitiesCurrent	8,953,000
Liabilities, Current	us-gaap_LiabilitiesCurrent	9,172,000
Liabilities, Current	us-gaap_LiabilitiesCurrent	8,392,000
Liabilities, Noncurrent	us-gaap_LiabilitiesNoncurrent	16,625,000
Liabilities, Noncurrent	us-gaap_LiabilitiesNoncurrent	20,291,000
Liabilities, Noncurrent	us-gaap_LiabilitiesNoncurrent	37,071,000
Liabilities, Noncurrent	us-gaap_LiabilitiesNoncurrent	35,241,000
Assets, Current	us-gaap_AssetsCurrent	13,894,000
Assets, Current	us-gaap_AssetsCurrent	9,965,000
Assets, Current	us-gaap_AssetsCurrent	96,899,000
Assets, Current	us-gaap_AssetsCurrent	$ 77,776,000

Sum of the carrying amounts as of the balance sheet date of all assets that are expected to be realized in cash, sold, or consumed within one year (or the normal operating cycle, if longer). Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.

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Sum of the carrying amounts as of the balance sheet date of all assets that are expected to be realized in cash, sold or consumed after one year or beyond the normal operating cycle, if longer.

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Total obligations incurred as part of normal operations that are expected to be paid during the following twelve months or within one business cycle, if longer.

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Amount of obligation due after one year or beyond the normal operating cycle, if longer.

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