Lendway increases credit facility and secures $4 million in new promissory notes

Lendway, Inc. (NASDAQ:LDWY), a company currently trading at $5.19 with a market capitalization of $8.85 million, announced a series of financing actions this week, according to a press release statement and its recent SEC filing. According to InvestingPro analysis, the stock appears undervalued relative to its Fair Value, with a notably low P/E ratio of 3.09.

On Monday, the company entered into a second amendment to its existing credit agreement with Associated Bank, N.A. and other lenders. Under the amended terms, the capacity of Lendway’s revolving credit facility was temporarily increased from $6 million to $10 million. This expanded capacity, as well as the inclusion of inventory in the Netherlands as eligible collateral, will remain in effect until April 30, 2026. The company reported an outstanding balance of $6.1 million under the facility as of Thursday.

The amendment also revises the senior cash flow leverage ratio covenant. Starting September 30, 2025, the interest rate for all loans under the facility will be based on a term SOFR rate plus a margin ranging from 3.00% to 4.00%, determined by the company’s cash flow leverage ratio.

In a separate development, Lendway entered into unsecured promissory notes totaling $4 million with Air T, Inc., AO Partners I, L.P., and Gary S. Kohler. The notes carry a fixed annual interest rate of 13.5% and are scheduled to mature on June 1, 2027. The proceeds are expected to be used to fund the operation of the Bloomia business. The notes restrict Lendway’s ability to incur additional indebtedness outside of existing and customary operational debt, unless waived by the majority of noteholders. No closing or origination fees were paid to the lenders.

The filing notes that Air T and AO Partners Fund, together with related parties, collectively own about 40% of Lendway’s outstanding common stock. Several company directors also hold roles with these lenders. The transaction was pre-approved by Lendway’s Audit Committee.

Additionally, Lendway entered into an amended and restated limited liability company agreement with its subsidiary Tulp 24.1, LLC and Werner F. Jansen. The agreement fixes the membership interest percentages and prioritizes repayment of unreturned capital contributions in future distributions. Lendway’s expected $4 million contribution to Tulp 24.1, LLC is excluded from members’ pre-emptive rights.

All information is based on a press release statement and the company’s Form 8-K filed with the SEC.

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