Sezzle Inc. 8-K

What Happened
Sezzle Inc. filed an 8‑K disclosing that its wholly owned indirect subsidiary, Sezzle Funding SPE II, LLC, entered into an Amended and Restated Revolving Credit and Security Agreement on May 7, 2026 with Bastion Funding VI, LP as administrative agent and certain lenders. The facility provides up to $300 million of asset‑based revolving credit, with an option to increase by $75 million, and matures on May 7, 2029. The company carried forward $153.5 million of outstanding borrowings from its prior facility into the amended facility.

Key Details

• Facility size: $300 million revolving credit, plus a $75 million accordion option; maturity May 7, 2029.
• Interest: 3‑month Term SOFR + 3.86% with a SOFR floor of 2.00%.
• Advance terms: minimum utilization $50 million; advance rate 92.5% of eligible pledged receivables (drops to 85% if recent vintages’ weighted average loss rate ≥ 3.75%).
• Guarantees & covenants: obligations guaranteed by Sezzle Funding SPE II Parent, LLC and supported by an amended Limited Guaranty from Sezzle; the agreements include customary covenants and events of default (including change of control and certain collateral performance triggers).
• Amendment No. 3 to the Limited Guaranty (May 7, 2026) updates restricted‑payment rules: restricted payments (e.g., dividends, share repurchases) are permitted if trailing 12‑month consolidated net income is positive and total restricted payments do not exceed $75 million plus 50% of consolidated net income after May 7, 2026 (with special treatment for net losses).

Why It Matters
This amended facility increases Sezzle’s committed liquidity capacity and formalizes borrowing terms through mid‑2029, giving the company access to an asset‑backed credit line at a SOFR‑based rate. For investors, the filing signals available funding to support operations and receivable financing, but also introduces covenants and guaranty provisions that can limit dividends, repurchases and other corporate actions and create events of default if financial or collateral performance thresholds aren’t met. The amendment to the Limited Guaranty also defines when Sezzle can make restricted payments, which affects shareholder distributions and capital return flexibility.