Terra Income Fund 6, LLC reported a significant decline in financial performance for the fiscal year ending December 31, 2024, with total revenues of $8.1 million, down from $10.3 million in 2023. The decrease was primarily driven by a $2.6 million drop in interest income, which fell to $7.6 million, attributed to a reduced weighted average principal balance of gross loans. The company also recognized $435,677 in prepayment fee income, a new revenue stream not present in the previous year. Overall, the company recorded a net loss of $12.5 million, compared to a loss of $5.6 million in 2023, reflecting a deterioration in profitability.
In terms of operational changes, Terra Income Fund 6, LLC saw a notable shift in its loan portfolio. The total net loans decreased to $30.4 million from $78.3 million in the prior year, largely due to principal repayments and a significant provision for credit losses of $6.0 million. The company’s loan portfolio is now concentrated in three loans secured by office, mixed-use, and multifamily properties, with the largest loan representing approximately 87.8% of the total net loan investments. The weighted average coupon rate for the loan portfolio increased to 15.8%, reflecting rising interest rates.
Strategically, the company entered into a revolving promissory note receivable with Terra REIT, amounting to $45.1 million as of December 31, 2024. This note bears interest at the Prime Rate and matures on March 31, 2027. Additionally, Terra Income Fund 6, LLC has maintained its equity interests in two joint ventures, although the carrying value of these investments decreased to $36.3 million from $40.4 million in the previous year, primarily due to losses from equity interests.
The company’s operational metrics indicate a challenging environment, with cash used in operating activities amounting to $0.2 million in 2024, a stark contrast to cash provided of $2.7 million in 2023. The total assets decreased to $115.9 million from $124.3 million, while total liabilities increased to $55.1 million, reflecting the new obligation under participation agreements. Looking ahead, Terra Income Fund 6, LLC anticipates continued challenges in the market, particularly due to its concentrated exposure to specific industries and borrowers, which may impact future financial performance.
About Terra Income Fund 6, LLC
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