Sezzle (NASDAQ: SEZL) refinances with $300M credit facility, lower spread
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Sezzle Inc. entered into an amended and restated senior secured revolving credit facility providing up to $300 million in borrowing capacity, with an option to increase by $75 million, maturing on May 7, 2029. The facility, arranged with Mesirow Alternative Credit (f/k/a Bastion), is priced at 3‑month Term SOFR plus 3.86% with a 2.00% SOFR floor and features an advance rate of up to 92.5% of eligible receivables, subject to performance tests, and a $50 million minimum utilization.
Sezzle carried forward $153.5 million outstanding from its prior revolving facility into this new structure, which also reduces the interest spread from 6.75% and increases committed capacity versus the earlier $150 million facility that had been expanded to $225 million. Amendment No. 3 to the Limited Guaranty and Indemnity Agreement updates covenants so Sezzle may make restricted payments, including dividends and share repurchases, provided trailing twelve‑month consolidated net income is positive and aggregate restricted payments remain within a formula tied to $75 million plus a percentage of consolidated net income or losses after May 7, 2026.
Positive
- Lower cost, larger facility: Sezzle refinanced into a $300 million revolving credit facility (with a $75 million accordion), cutting the interest spread from 6.75% to 3.86% over SOFR and increasing advance rates, which should materially reduce funding costs and support growth capacity.
Negative
- None.
Insights
Sezzle refinances into a larger, cheaper credit facility with added flexibility for shareholder returns.
The company secured a senior secured revolving credit facility of up to $300 million, with a $75 million accordion, replacing and upsizing its prior structure. Pricing at 3‑month Term SOFR plus 3.86% cuts the spread from 6.75%, materially lowering funding costs on receivables financing.
The advance rate increases to as much as 92.5% of eligible receivables, improving balance sheet efficiency, while minimum utilization drops to $50 million from $60 million. Amendment No. 3 to the Limited Guaranty allows dividends and buybacks when trailing twelve‑month consolidated net income is positive and payouts stay within a formula tied to $75 million plus a share of future consolidated net income or losses.
This combination of reduced spread, higher advance rate, and a clearer path to restricted payments is generally favorable for Sezzle’s cost of capital and capital‑allocation optionality, though ongoing compliance with receivables performance triggers and consolidated financial covenants remains essential.
8-K Event Classification
4 items: 1.01, 2.03, 7.01, 9.01
4 items
Item 1.01
Entry into a Material Definitive Agreement
Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
Financial
The company incurred a new significant debt or off-balance-sheet obligation.
Item 7.01
Regulation FD Disclosure
Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Revolving facility size: $300 million
Accordion feature: $75 million
Interest spread: SOFR + 3.86%
+5 more
8 metrics
Revolving facility size
$300 million
Senior secured receivables-based revolving credit facility
Accordion feature
$75 million
Optional increase to borrowing capacity under facility
Interest spread
SOFR + 3.86%
New facility pricing vs prior 6.75% spread
Prior spread
6.75%
Spread on earlier receivables funding facility
Advance rate
Up to 92.5%
Of eligible receivables originations, performance dependent
Minimum utilization
$50 million
Required minimum draw under new facility; prior $60 million
Outstanding rolled in
$153.5 million
Debt under prior facility carried into amended facility
Restricted payments base amount
$75 million
Component of formula limiting dividends and buybacks
Key Terms
Revolving Credit Facility, advance rate, Limited Guaranty and Indemnity Agreement, restricted payments, +2 more
6 terms
Revolving Credit Facility financial
"the Borrower entered into a senior, secured, asset-based revolving credit facility (the “Revolving Credit Facility”)"
A revolving credit facility is a type of loan that a business can borrow from whenever it needs money, up to a set limit. It’s like having a credit card for companies—allowing them to borrow, pay back, and borrow again as needed, providing flexibility for managing cash flow or funding short-term expenses.
advance rate financial
"the advance rate is 92.5% of the eligible, pledged receivable balance"
The advance rate is the percentage of an asset’s appraised or stated value that a lender is willing to loan against, commonly used for receivables, inventory, or property. For investors it shows how much immediate cash a company can raise from its assets — like the share of value a pawnbroker will lend you — and affects liquidity, borrowing capacity and perceived credit risk.
Limited Guaranty and Indemnity Agreement financial
"Amendment No. 3 to the Limited Guaranty and Indemnity Agreement"
restricted payments financial
"the ability of Sezzle to make “restricted payments,” which include dividends to stockholders and repurchases"
Restricted payments are cash or asset transfers that a company is contractually barred or limited from making, such as dividends, stock buybacks, certain investments or returns of capital, typically under loan agreements or bond covenants. Investors care because these limits protect creditors by keeping cash in the business, and they directly affect shareholder returns and a company’s flexibility to reward owners or pursue opportunities — like rules on withdrawals from a shared bank account.
unused line fee financial
"Unused Line Fee: 0.50% per annum on unused committed capacity"
A fee a lender charges on the portion of a loan or credit line a borrower has reserved but not used, similar to paying a small charge to hold a hotel room or keep a credit card limit open. It matters to investors because it raises a borrower’s ongoing financing cost even when cash isn’t drawn, reducing net cash available and affecting profit margins, liquidity planning and the attractiveness of debt arrangements.
change of control financial
"events of default (including, among others, an event of default upon a change of control)"
A change of control occurs when the ownership or management of a company shifts significantly, such as through a sale, merger, or acquisition, resulting in new leadership or ownership structure. This change can impact the company's direction and decision-making, which is important for investors because it may affect the company's stability, strategy, and future prospects.
| UNITED STATES | ||||||||
| SECURITIES AND EXCHANGE COMMISSION | ||||||||
| WASHINGTON, D.C. 20549 | ||||||||
FORM | ||||||||
| CURRENT REPORT | ||||||||
| Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | ||||||||
Date of Report (Date of earliest event reported): May 7, 2026
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of principal executive offices, including zip code)
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement
Revolving Credit and Security Agreement
On May 7, 2026, Sezzle Funding SPE II, LLC (the “Borrower”), a wholly owned indirect subsidiary of Sezzle Inc. (“Sezzle” or the “Company”), Bastion Funding VI, LP, as administrative agent (the “Agent”), and certain lenders party thereto, executed the Amended and Restated Revolving Credit and Security Agreement (the “Credit Agreement”). Under the Credit Agreement, the Borrower entered into a senior, secured, asset-based revolving credit facility (the “Revolving Credit Facility”) with a borrowing capacity of up to $300 million, and the option to increase the borrowing capacity by an additional $75 million. The Credit Agreement has a maturity date of May 7, 2029. The Revolving Credit Facility carries an interest rate of 3-month Term SOFR plus 3.86%, with a 3-month Term SOFR floor of 2.00%. The Revolving Credit Facility’s minimum utilization is $50 million, and the advance rate is 92.5% of the eligible, pledged receivable balance, unless the three most recent Seasoned Vintages (as defined in the Credit Agreement) have a Weighted Average Loss Rate (as defined in the Credit Agreement) of 3.75% or more, in which case the advance rate is equal to 85%.
The obligations of the Borrower under the Revolving Credit Facility are guaranteed by Sezzle Funding SPE II Parent, LLC (“SPE II Parent”), a wholly owned subsidiary of the Company, which is the sole member and owner of 100% of the equity interests of the Borrower, pursuant to that certain Pledge and Guaranty Agreement dated as of April 19, 2024, entered into by SPE II Parent in favor of the Agent on behalf of the secured parties under the new revolving credit facility (the “Parent Guaranty”). The Revolving Credit Facility is further supported by a limited guaranty and indemnity of certain losses, expenses, and claims of the lenders and other secured parties, provided by the Company, as the direct owner of 100% of the legal and beneficial equity interests in SPE II Parent, pursuant to Amendment No. 3 to the Limited Guaranty and Indemnity Agreement, as discussed further below (the “Limited Guaranty”). The Credit Agreement, Parent Guaranty, and Limited Guaranty, and the additional ancillary agreements related to the Revolving Credit Facility are referred to collectively herein as the Credit Facility Agreements.
The Credit Agreement includes certain restrictive covenants and, among other things and subject to certain exceptions and qualifications, limits the Borrower’s ability to: (i) incur or guarantee additional indebtedness, (ii) make investments or other restricted payments, (iii) acquire assets or form or acquire subsidiaries; (iv) create liens, (v) sell assets, (vi) pay dividends or make other distributions or repurchase or redeem capital stock, (vii) engage in certain transactions with affiliates, (viii) enter into agreements that restrict the creation or incurrence of liens other than liens securing the new revolving credit facility and related documents, (ix) engage in liquidations, mergers or consolidations, and (x) make any material amendment, modification or supplement to its credit guidelines or servicing guide. SPE II Parent is subject to similar restrictive covenants contained in the Parent Guaranty.
The Limited Guaranty limits the Company’s ability to make certain restricted payments and includes financial maintenance covenants pertaining to the tangible net worth, liquidity and leverage of the Company and its subsidiaries on a consolidated basis (the “Consolidated Group”). A failure by the Consolidated Group to satisfy the financial covenants under the Limited Guaranty constitutes an event of default under the Revolving Credit Facility.
The Credit Agreement also contains certain customary representations and warranties, affirmative covenants and events of default (including, among others, an event of default upon a change of control). An immediate event of default is also deemed to have occurred if ratios pertaining to defaulted collateral receivables of a particular vintage or past due collateral receivables within a certain collection period exceed pre-determined levels.
Prior to May 7, 2026, Sezzle had $153.5 million outstanding under its then existing revolving credit facility with Bastion Funding VI, LP, as Administrative Agent on behalf of the lenders thereunder. In connection with the amendment and restatement of this prior credit facility, no amounts were repaid at closing, and the outstanding obligations were carried forward into the amended and restated Revolving Credit Facility disclosed in this Current Report.
The foregoing descriptions of the Credit Agreement and Limited Guaranty are summaries only, and are qualified in their entirety by reference to those agreements, copies of which are filed herein as Exhibits 10.1 and 10.2, respectively. The Credit Facility Agreements are not intended to be a source of factual, business or operational information about the Company or its subsidiaries. The representations and warranties contained in the Credit Agreement, Parent Guaranty and Limited Guaranty were made only for purposes of such agreement (or the applicable related agreements) and as of specific dates, were solely for the benefit of the parties to such agreement (or the applicable related agreements), and may be subject to limitations agreed upon by the parties, including being qualified by disclosures for the purpose of allocating contractual risk between the parties instead of establishing matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors or security holders. Accordingly, investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties.
In the ordinary course of their respective businesses, one or more of the lenders under the Credit Facility Agreements, or their affiliates, have performed, and may in the future perform, commercial banking, investment banking, trust, advisory or other financial services for the Company and its affiliates for which they have received, and will receive, customary fees and expenses.
Limited Guaranty and Indemnity Agreement
On May 7, 2026, Sezzle and Bastion Funding VI, LP, in its capacity as administrative agent on behalf of the Secured Parties under the Company’s Revolving Credit and Security Agreement, executed Amendment No. 3 to the Limited Guaranty and Indemnity Agreement. The amendment updates the covenant regarding the ability of Sezzle to make “restricted payments,” which include dividends to stockholders and repurchases of its shares of common stock. The amendment permits restricted payments so long as Sezzle’s trailing twelve months of consolidated net income is positive and the aggregate amount of restricted payments does not exceed the sum of $75 million and 50% of Sezzle’s consolidated net income after May 7, 2026 (or 100% of consolidated net losses after such time).
The foregoing description of the amendment is a summary only, and is qualified in its entirety by reference to the amendment, a copy of which is filed as Exhibit 10.2 herein.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant
The information set forth in Item 1.01 of this Current Report on Form 8-K with respect to the Credit Agreement and Limited Guaranty and Indemnity Agreement is hereby incorporated by reference into this Item 2.03.
Item 7.01. Regulation FD Disclosure
On May 11, 2026, the Company issued a press release announcing the foregoing transaction, which press release is filed as Exhibit 99.1 to this Current Report.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
| Exhibit No. | Description | |||||||
| 10.1 | Amended And Restated Revolving Credit And Security Agreement, dated May 7, 2026 | |||||||
| 10.2 | Amendment No. 3 To Limited Guaranty And Indemnity Agreement, dated May 7, 2026 | |||||||
| 99.1 | Press Release, dated May 11, 2026 | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SEZZLE INC. | ||||||||
| Dated: May 11, 2026 | By: | /s/ Justin Krause | ||||||
| Justin Krause | ||||||||
| SVP Finance and Controller | ||||||||
May 11, 2026
Sezzle Secures $300 Million Credit Facility - Expanding Capacity and Lowering Cost of Capital
Sezzle Inc. (NASDAQ:SEZL) (Sezzle or Company) // Purpose-driven digital payment platform, Sezzle, today announced a new $300 million receivables funding facility with Mesirow Alternative Credit (f.k.a. Bastion), which will serve as both Lender and Administrative Agent. The new facility doubles the Company’s original $150 million committed facility established in April 2024, which was subsequently expanded to $225 million through an accordion feature. The refinancing lowers Sezzle’s cost of capital and expands committed capacity to support the Company’s continued growth.
The facility carries an interest rate of Secured Overnight Financing Rate (SOFR) plus 3.86%, a reduction of nearly 290 basis points from the prior facility's spread of 6.75%. The advance rate has been increased to up to 92.5% of eligible receivables originations, compared with up to 90.0% previously.
“As Sezzle continues to scale, efficient and flexible funding remains a key priority,” said Lee Brading, Chief Financial Officer of Sezzle. “This new facility materially improves our cost of capital, expands our committed capacity, and better positions us to support the growth opportunities ahead. We believe these improved terms reflect the strong performance of our receivables and the disciplined approach our team has taken to credit and capital management.”
Key Terms of the Facility
•Size: $300 million plus $75 million accordion
•Term: 3 years
•Interest Rate: 3-month Term SOFR + 3.86% with a SOFR floor of 2.0%
•Advance Rate: 85.0% or 92.5% of eligible originations, dependent upon receivable performance
•Unused Line Fee: 0.50% per annum on unused committed capacity, payable monthly in arrears
•Minimum Utilization: $50 million throughout the life of the facility; previous facility minimum utilization was $60 million
•Other: Covenants, representations & warranties, and reporting obligations typical of a similar receivables warehouse facility
Sezzle Inc. (NASDAQ:SEZL) | sezzle.com | 700 Nicollet Mall, Suite 640, Minneapolis, MN 55402
1
Contact Information
Jack Fagan Investor Relations (651) 240-6001 investorrelations@sezzle.com | Erin Foran Media Inquiries (651) 403-2184 erin.foran@sezzle.com | |||||||
About Sezzle Inc.
Sezzle is a forward-thinking fintech company committed to financially empowering the next generation. Through its purpose-driven payment platform, Sezzle enhances consumers' purchasing power by offering access to point-of-sale financing options and digital payment services—connecting millions of customers with its global network of merchants. Centered on transparency, inclusivity, and ease of use, Sezzle empowers consumers to manage spending responsibly, take charge of their finances, and achieve lasting financial independence.
For more information visit sezzle.com.
Sezzle Inc. (NASDAQ:SEZL) | sezzle.com | 700 Nicollet Mall, Suite 640, Minneapolis, MN 55402
2
FAQ
What did Sezzle Inc. (SEZL) announce about its new credit facility?
Sezzle Inc. entered a senior secured revolving credit facility providing up to $300 million, with an additional $75 million accordion. The facility refinances and upsizes its prior structure, extending maturity to May 7, 2029 and improving borrowing terms tied to its receivables performance.
How does Sezzle’s new $300 million facility change its cost of capital?
The new facility is priced at 3‑month Term SOFR plus 3.86%, down from a 6.75% spread on the prior facility. This nearly 290‑basis‑point reduction should materially lower interest expense on receivables financing, improving Sezzle’s overall funding efficiency as utilization increases.
What are the key structural terms of Sezzle’s new revolving credit facility?
Key terms include a $300 million committed size, a $75 million accordion, three‑year term to May 7, 2029, up to 92.5% advance rate on eligible receivables, a $50 million minimum utilization requirement, and a 0.50% annual unused line fee on unutilized commitments, payable monthly in arrears.
How much debt did Sezzle (SEZL) roll into the new credit facility?
Before executing the amended and restated agreement, Sezzle had $153.5 million outstanding under its existing revolving credit facility. No amounts were repaid at closing; instead, these outstanding obligations were carried forward into the new $300 million revolving structure with updated terms and covenants.
What performance triggers can affect Sezzle’s advance rate under the facility?
The standard advance rate is 92.5% of eligible pledged receivables. However, if the three most recent Seasoned Vintages have a Weighted Average Loss Rate of 3.75% or more, the advance rate falls to 85%. This links borrowing capacity directly to receivables credit performance over recent vintages.