MFIN · Medallion Bank

The event of default declared by the Small Business Administration on March 31, 2026, affects $73.5 million in debentures issued to Medallion Capital, Inc., representing about 3% of Medallion Financial Corp.'s total consolidated borrowings at quarter-end. These debentures offer favorable long-term (typically 10-year) fixed-rate financing compared to other capital sources. The trigger was the SBA's determination that Medallion Capital lacks a qualified management team, prompting a required review through its licensing division. Following Medallion Capital's submission of a management team for review, the SBA immediately declared default and mandated identification of at least one qualified full-time principal and investment committee member within 120 days. Ongoing discussions confirmed the need for this supplement, which Medallion Capital is actively pursuing. Critically, this default does not activate cross-default provisions in the company's broader debt portfolio, limiting immediate contagion risk. However, non-compliance could result in immediate acceleration of principal, accrued interest, and additional remedies under the Small Business Investment Act of 1958. While Medallion Capital expresses confidence in resolving the issue, investor attention will focus on the 120-day timeline and SBA's final acceptance, as these low-cost borrowings support the company's lending operations.