KBRA assigns preliminary ratings to four classes of notes (the “Notes”) issued by Kapitus Asset Securitization IV LLC, Series 2024-1.

Kapitus, formerly known as Strategic Funding Source, Inc. (“Kapitus” or the “Company”), was founded in 2006 and provides financing to small and medium-sized businesses through the use of proprietary risk scoring models, transactional data and technology systems. Since 2014, Kapitus has received financial support from Pine Brook Partners, a New York-based private equity firm with experience investing in financial services companies.

This transaction represents the first series of notes issued by Kapitus Asset Securitization IV LLC (the “Issuer”), but the seventh series of notes sponsored by the Company. The Issuer will issue four classes of Series 2024-1 Notes totaling $160 million initially. The transaction features a three-year revolving period unless a Rapid Amortization Event has occurred (the “Revolving Period”). During the Revolving Period, the Issuer will purchase additional receivables that meet the eligibility criteria and concentration limits.

The Series 2024-1 Notes are “expandable” term notes such that at any time during the Revolving Period, the Issuer may upsize the current Notes, up to a maximum amount of $500 million, as long as certain conditions are met, including receipt of Rating Agency Confirmation. The consent of existing noteholders will not be required for these upsizes. As such, upsizes may dilute the control and voting rights of existing noteholders.

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Methodologies

• ABS: General Global Rating Methodology for Asset Backed Securities
• Structured Finance: Global Structured Finance Counterparty Methodology
• ESG Global Rating Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1006074

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