Inflation is the highest it has been since 1981 sitting at a whopping 9.1% as of June 2022.
This, as with rising costs due to supply chain issues, has driven many Americans into non-bank lending and specialty finance. In fact, 68% of all mortgages in 2020 came from non-bank lenders.
Independent non-bank lenders are playing an increasingly important role in the global economy by providing funding where banks are less keen.
This brings us to Mill City Ventures III, Ltd. (NASDAQ: MCVT), a small cap company on the NASDAQ dedicated to helping companies and individuals with their refinancing needs.
The company’s recent quarter results showed that interest income from lending operations increased 83% to $1M compared to $546k for the prior-year period as well as pre-tax earnings from lending operations increased in the prior-year period.
High-Net-Worth individuals and companies come to MCVT because of much faster turn-around time to closing versus traditional banks.
MCVT also has a relatively low trading float, reported recently at 2.5 million shares, making this small cap company worth watching!
Specialty financing is becoming more popular now than ever as the traditional banking system and capital markets are less receptive to lending to niche segments of specialty finance, which creates an exciting opportunity for companies like MCVT to step in.
Investors are increasingly drawn to this market due to strong risk-adjusted returns and high cash yields.
"We have achieved our ninth record quarter for both income and earnings from our lending operations. We continue to see strong demand for our loan products and have been able thus far to maintain a zero-loss ratio with respect to defaults in our loan portfolio .With the establishment of our $5M line of credit in the fourth quarter, we were able to leverage our equity and grow our loan business substantially. Our revenue growth continues to outpace the growth in operational expenses allowing for us to expand our net margins.”
-Chief Executive Officer Douglas M. Polinsky of MCVT
Earlier this year, MCVT announced its funding of a pre-closing to the sale of a 350-unit apartment complex. The company advanced $3.9 million in the form of a short-term note. Subsequently, this note has been paid back, and MCVT's annualized return equaled 32%
"With the recent closing of our credit facility, we are now in a position to expand the size of our funding opportunities. We have seen an increase in deal flow and continue to pursue investment opportunities in adjudicated insurance settlements, asset-based loans, real-estate-backed loans, and equity investment opportunities."
MCVT’s Chief Executive Officer, Douglas M. Polinsky
Non-bank lending has seen recent growth as more consumers and small businesses are turning to non-traditional financing.
According to Oracle’s Digital Demand in Retail Banking study of 5,200 consumers from 13 countries, over 40% of customers surveyed think nonbanks can better assist them with personal money management and investment needs, and 30% of respondents who haven’t tried a nonbank platform said they’re open to trying one!
According to data reported by SME Finance Forum, in 2018 there was funding gap of $5 trillion between the financing needs of small and medium businesses and the institution-based financing available to them causing small businesses to seek alternative funding options.
Inflation is the highest it has been since 1981 sitting at a whopping 9.1% as of June 2022, making many consumers and small businesses look for alternative finance options in dire times driving more attention to companies like MCVT.
MCVT has seen incredible revenue growth, making the company exciting to keep an eye on. The company’s recent quarter results showed that interest income from lending operations increased 83% to $1M compared to $546k for the prior-year period as well as pre-tax earnings from lending operations increased to $454k compared to $12k in the prior-year period.
Earlier this year, MCVT announced its funding of a pre-closing to the sale of a 350-unit apartment complex. The company advanced $3.9 million in the form of a short-term note. Subsequently, this note has been paid back, and MCVT's annualized return equaled 32% This investment represented the largest single investment in company history!
According to recent surveys, over 40% of customers surveyed think nonbanks can better assist them with personal money management and investment needs bringing more attention to non-traditional lenders.
With rising inflation due to effects of the pandemic, growing gas prices, and supply chain issues driving costs, non-bank lending has increased exponentially! Issuance of asset-backed securities increased by 16.3% to $73.5 billion in Q2 2021, up from $63.3 billion in Q1 2021.
Non-bank lenders have seen a 64% increase in demand while commercial banks only saw a 25% increase in demand! This goes to show many consumers and small businesses are rejecting traditional forms of financing and turning to companies like MCVT for their lending needs.
Mill City Ventures III, Ltd. (NASDAQ: MCVT). was founded in January, 2006 and is based in Wayzata, Minnesota.
MCVT is a non-bank lender/specialty finance firm specializing investments in debt and equity securities of public and private companies to fund their operations whether its start-up, acquisition, or growth.
The company’s mission is to please both their borrowers and, most importantly, their stakeholders. They loan to private companies. The company brings the financing necessary for borrowers to fund their operations whether it’s real estate bridge mortgages and loans, cash for operations or general purpose loans with sufficient collateral.
MCVT’s goal is to achieve above market returns for their investors while working diligently to mitigate investor risk. The company management has the unique ability to please both of these interested parties.
MCVT earlier this year, announced its funding of a $3.4 million short-term loan to facilitate the acquisition of a parcel of land located in Glendale, AZ, where 139 townhouse units are expected to be developed.
The short-term note is expected to generate a minimum annualized return of 53% to Mill City.
MCVT has seen an increase in demand of funding opportunities since the beginning of 2022, and continues to pursue transactions in adjudicated insurance settlements, asset-based loans, real estate backed loans, and equity investment opportunities.
"This investment represents our first foray into the red hot greater Phoenix multi-unit housing market. Our streamlined underwriting process allowed us to get involved in this transaction late in the game and still meet the closing deadline for this promising townhome development project."
MCVT CEO Douglas M. Polinsk
Mill City Ventures III, Ltd. (NASDAQ: MCVT) is a non-bank lender and specialty finance company dedicated to helping companies and high net-worth individuals.
Inflation has driven many Americans into non-bank lending and specialty finance, in fact 68% of all mortgages in 2020 came from non-bank lenders and non-bank lenders have seen 64% of growth in interest from small companies and consumers alike.
MCVT has seen incredible revenue growth with 2021 being a record breaking year for the company. In 2022, the company has been reporting exciting quarter revenue growth as well.
MCVT’s goal is to achieve above market returns for their investors while working diligently to mitigate investor risk.
All of this points to Mill City Ventures III, Ltd. (NASDAQ: MCVT) as an exciting, small-cap company that is sure to dominate the growing specialty finance sector!
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