XS Financial Inc., a specialty finance company providing equipment leasing solutions to cannabis companies in the United States, announced that a newly formed wholly owned subsidiary, incorporated as a special purpose vehicle for the purpose of funding new leases under the credit facility, has entered into a definitive two-year credit agreement with the Garrington Group of Companies Inc. or a secured drawdown term loan (Credit Facility) in the aggregate amount of up to $15 million.

Loans made under the Credit Facility will bear interest at an annual rate equal to Prime plus 8.5 percent per annum with a Prime Rate floor of no less than 3.25 percent. The loans made under the Credit Facility contain customary financial covenants for transactions of this type, including limitations with respect to indebtedness, liens, and disposition of assets. Subject to demand or an uncured event of default, the Credit Facility shall mature two years from the Closing Date.

XS Financial intends to use such loan proceeds, together with cash on hand, to fund additional equipment leases with new and existing customers.

David Kivitz, CEO of XS Financial commented: "We are pleased to be working with Garrington, who specializes in providing financing to specialized lenders like XS Financial. This credit facility provides XS Financial with greater financial flexibility and positions us for long-term success. Our ability to secure this facility with favorable pricing and terms speaks to both the improving fundamentals and credibility of XS Financial, and the growing number of high-quality customers we finance, including several of our industry's largest companies. XS has now secured non-dilutive financing through its FDIC bank lender, our syndication desk, and now Garrington and utilizes each of these capital sources strategically to finance different leasing customers, manage portfolio concentration, and optimize the cost of capital to the Company, all in support of driving rapid and disciplined profit growth."

Tammy Kemp, Chief Credit Officer of Garrington, commented, "We are delighted with the relationship with XS Financial Inc. as they have truly been a great team to work with. This credit facility will allow them to continue to grow their business and set them up for long term continued success. We look forward to a collective, long-term rewarding partnership with XS Financial for many years to come."

Garrington was established in January 2019 as part of a greater blueprint to develop a leading North American loan origination, underwriting and operations platform: handling Asset Based Lending, Factoring, Equipment Finance, Lender Finance and Specialty Finance loans ranging from $1 million to $30 million. Garrington's creation comes from its acquisition of Liquid Capital at the beginning of 2019.