Air T, Inc. Amends Alerus Credit Agreement; Revolving Credit Raised to $25M

What Happened
Air T, Inc. filed an 8-K (dated September 4, 2026) disclosing Amendment No. 7 to its Alerus Financial credit agreement, effective September 1, 2026. The amendment increases the consolidated revolving credit commitment to $25.0 million (from $20.0M), terminates a prior temporary overline commitment, and restates the borrowings into a $25.0M Amended and Restated Revolving Credit Note and an $11.46M Consolidated Term Note. The Company (Air T) remains guarantor and the loans continue to be secured under existing loan documents.

Key Details

• Effective date: September 1, 2026; 8-K filed September 4, 2026.
• Revolving commitment increased to $25.0 million; revolving maturity date August 27, 2029.
• Consolidated Term Note: original principal $11.46 million; monthly principal installments of $95,500 through Aug 15, 2029, $119,375 thereafter through Aug 15, 2031; final maturity Aug 27, 2031.
• Borrowing base revised: 85% of eligible investment-grade accounts, 80% of other eligible accounts, 50% of eligible inventory, 40% of eligible work-in-process; combined inventory cap 75% of borrowing base. Specified U.S. government receivables may remain eligible.
• Interest: Revolving and accordion loans at the greater of 5.00% or CME 1-month term SOFR plus a leverage-based margin; Consolidated Term Note at CME 1-month term SOFR plus margin. Applicable margin initially 2.50% (range 2.25%–2.75% based on leverage).
• Fees and covenants: 0.25% annual unused commitment fee; leverage ratio may not exceed 3.00 to 1.00.
• Accordion: option to request up to $3.5M additional revolving commitment for a 120-day period once per fiscal year (0.50% origination fee; must meet pro forma covenants).
• Security and guaranty: Borrowers remain jointly and severally liable; obligations remain secured and Air T’s guaranty and pledge agreement remain in force. Global Ground Support granted a Federal Assignment of Claims for certain U.S. Air Force receivables. On default, lender may accelerate obligations and add a 5.00% default interest premium.

Why It Matters
This amendment increases Air T’s available revolving liquidity by $5.0M, extends the formal revolving maturity to 2029, and consolidates term loans—changes that can improve near-term cash flexibility and simplify debt servicing. The revised borrowing base, leverage covenant cap (3.0x), interest mechanics (SOFR floor and leverage-based margin), and accordion feature define how much additional funding is available and under what cost and covenant conditions. Investors should note the loans remain secured and guaranteed by Air T, and government receivables were specifically assigned as collateral for potential enforcement on default.