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Filed pursuant to Rule 424(b)(3)

Registration File No. 333-250027

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united states

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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POST-EFFECTIVE AMENDMENT NO. 2

FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Ministry Partners Investment Company, LLC

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(Exact name of registrant as specified in its charter)

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915 West Imperial Highway, Suite 120

Brea, California 92821

(800) 753-6742

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(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

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JOSEPH W. TURNER, JR.

Chief Executive Officer, President

915 West Imperial Highway, Suite 120

Brea, California 92821

(800) 753-6742

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(Name, address and telephone number of agent for service)

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With copies to:

RANDY K. STERNS, ESQ.

BUSH ROSS, P.A.

1801 N. Highland Avenue

Tampa, Florida 33602

(813) 224-9255

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As soon as practicable after the Registration Statement becomes effective.

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(Approximate date of commencement of proposed sale to the public)

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If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: þ

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If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ¨

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If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

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If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

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The date of this Prospectus is December 05, 2022

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨Accelerated filer ¨

Non-accelerated filer ¨Smaller reporting company þ

Emerging growth company ¨

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ¨

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EXPLANATORY NOTE

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This Post-Effective Amendment No. 2 to Form S-1 (File No. 333-250027) of Ministry Partners Investment Company, LLC is being filed pursuant to Section 10(a)(3) of the Securities Act to (i) consolidate the disclosures made in our registration statement which was initially declared effective by the Securities and Exchange Commission on January 8, 2021, with disclosures made in supplements and on our subsequently filed reports on Form 10-K and Form 10-Q into a single prospectus; (ii) describe revisions to the Company’s loan policies authorizing investments in commercial loans made to Christian business owners; ( iii) reduce the categories of debt securities offered as part of our Class A Fixed Series and Variable debt securities under the Prospectus; (iv) rename the 2021 Class A Notes currently being offered to “Class A Debt Certificates” to be offered for sale and purchase under the Prospectus; (v) to make certain updating revisions contained herein so that information in the Prospectus is current as of the date of the filing.

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$125,000,000

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MINISTRY PARTNERS INVESTMENT COMPANY, LLC

2021 Class A Debt Certificates

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We are a financial services company whose mission is to strengthen Christian stewardship by providing financial products and services to both organizations and individuals. We serve churches, ministries, individuals, businesses, and other financial institutions. We provide our clients with high quality advice based upon sound biblical and business principles through our investment advisory, insurance agency, broker-dealer, church financing, or servicing operations.

Throughout this prospectus we refer to the 2021 Class A Debt Certificates as the “Certificates”, the “Class A Certificates”, or the “Class A Debt Certificates”. The Certificates are our unsecured and unsubordinated obligations and, except as described herein, rank equal in right to payment with our existing and future unsecured creditors.

We are offering our Certificates in two Series: the Fixed Series and the Variable Series. Each Series is offered in several Categories, each of which has a minimum required investment. Each Class A Certificate bears interest at a rate equal to the sum of the Spread for the respective Series Category plus the applicable index rate. We are offering the Fixed Series Certificates with maturities of 12, 18, 24, 30, 36, 42, 48, 54 and 60 months. Also, we are offering the Variable Series Certificates with a maturity of 60 months. The interest rates for each Certificate series will vary within the pre-determined interest rate and Spread as described in the Prospectus. Unless otherwise indicated, the words “we”, “us”, “our”, or the “Company” refer to Ministry Partners Investment Company, LLC, together with four wholly owned subsidiaries.

We are offering the Certificates on a best efforts basis through our wholly owned subsidiary, Ministry Partners Securities, LLC (“MP Securities”). This is a continuous offering and there is no minimum amount of Class A Certificates that must be sold before we can use any of the proceeds. At any time, you may contact us or visit our website at www.ministrypartners.org to obtain our current interest rates for each Series of Certificates. However, the information on our website is not part of this Prospectus. If there is a change in terms of the Certificates that does not constitute a material and fundamental change in the offering of such Certificates, this information will be included in a Rule 424(b)(3) prospectus supplement.

INVESTING IN THE CERTIFICATES INVOLVES RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL. SEE “RISK FACTORS” BEGINNING ON PAGE 21 OF THIS PROSPECTUS AND OUR MOST RECENT ANNUAL REPORT ON FORM 10-k, WHICH IS INCORPORATED HEREIN BY REFERENCE, AS WELL AS ANY ADDITIONAL RISK FACTORS INCLUDED IN, OR INCORPORATED BY Reference INTO, A PROSPECTUS SUPPLEMENT. THERE WILL BE NO PUBLIC MARKET FOR THE CERTIFICATES.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH STATE.

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The Certificates are part of up to $300 million of Class A Debt Certificates we are authorized to issue under the 2021 Class A Notes Trust Indenture, dated January 6, 2021, as amended effective as of October 28, 2022 which we refer to as the “Indenture.” U.S. Bank Trust Company, National Association (successor in interest to U.S. Bank National Association), whom we refer to as “Trustee,” serves as the Trustee under the Indenture.

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You should read this Prospectus and any applicable Prospectus supplement carefully before you invest in the Certificates. The Certificates are our general unsecured obligations and are subordinated in right of payment to all of our present and future senior debt. As of December 31, 2021, we had approximately $34.8 million in debt outstanding that ranks senior to the Certificates and approximately $76.8 million in debt securities issued equal in rank to the Certificates. We expect to incur additional debt in the future, including, without limitation, the Certificates offered pursuant to this Prospectus and senior debt.

We do not intend to list our Class A Certificates on any securities exchange during the offering period and we do not expect a secondary market in the Class A Certificates to develop. The Certificates and other securities we offer are not deposits of, obligations of, or guaranteed by the National Credit Union Share Insurance Fund (“NCUSIF”), the Federal Deposit Insurance Corporation (“FDIC”), or any other government agency or private insurer.

We are a “smaller reporting company” under the federal securities laws and subject to reduced public company reporting requirements.

We file annual, quarterly, and current reports with the United States Securities and Exchange Commission (“SEC”). Our Trust Indenture requires us to file these reports with the SEC even if the SEC does not require us to file them. This information will be available free of charge by contacting us at 915 West Imperial Highway, Suite 120, Brea, California 92821, or by phone at (800) 753-6742. This information may also be accessed on our website at www.ministrypartners.org. Additionally, this information is available on the SEC website at www.sec.gov. We will issue Class A Certificates in book-entry form and will deliver written confirmation to purchasers of our Class A Certificates.

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SELECTED DEFINITIONS

In this Prospectus, the following “terms” used herein shall have the following meanings:

“Certificates” or “Class A Certificates” means the Company’s Class A Debt Certificates previously known as the 2021 Class A Notes”.

“CMT Index” means the Constant Maturity Treasury rates published by the U.S. Department of Treasury for actively traded Treasury securities.

“Company” means Ministry Partners Investment Company, LLC.

“FINRA" means the Financial Industry Regulatory Authority.

“Fixed Series Certificates” means the four categories of Certificates offered with a fixed maturity term and fixed interest rate.

“Fixed Spread" or "Variable Spread” means the difference between the applicable interest rate then in effect and the amount of interest payable on your Certificate as determined for each offered under this Prospectus.

“Holders" means the persons purchasing Certificates under this Offering.

“Indenture” means the 2021 Class A Notes Trust Indenture dated January 6, 2021, as amended on October 28, 2022.

“Manager” or “Managers” means the person serving as a Board of Managers for the Company.

“Members” means the Company’s equity owners.

“MP Securities” means Ministry Partners Securities, LLC.

“SOFR” means the Secured Overnight Financing Rate published by the Federal Reserve Bank of New York, including any recommended spread adjustment and benchmark.

“Spread” means the difference between the applicable index rate and the interest rate we pay on the Fixed Certificate or Variable Certificate purchased.

“Trustee” means U.S. Bank Trust Company, National Association (successor in interest to U.S. Bank National Association).

“Variable Series Certificates” means the three categories of Certificates, each having a minimum purchase amount and maturity term of sixty months.

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INTRODUCTION‌2

FREQUENTLY ASKED QUESTIONS ABOUT THE CLASS A CERTIFICATES and this offering‌2

SUITABILITY STANDARDS‌12

PROSPECTUS SUMMARY‌16

WARNING CONCERNING FORWARD-LOOKING STATEMENTS‌20

RISK FACTORS‌21

ESTIMATED USE OF PROCEEDS‌36

DESCRIPTION OF THE CERTIFICATES‌39

DESCRIPTION OF THE INDENTURE‌45

Management’s Discussion and analysis of financial condition and results of operations‌53

OUR COMPANY‌75

BOARD OF MANAGERS AND EXECUTIVE OFFICERS‌94

EXECUTIVE COMPENSATION‌101

BOARD OF MANAGERS COMPENSATION‌101

DESCRIPTION OF OUR MEMBERSHIP INTERESTS AND CHARTER DOCUMENTS‌102

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT‌106

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE‌108

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS‌110

PLAN OF DISTRIBUTION‌112

HOW TO PURCHASE A CERTIFICATE‌116

LEGAL MATTERS‌117

EXPERTS‌117

WHERE YOU CAN FIND MORE INFORMATION‌117

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA‌119

EXHIBIT A: Amendment No. 1 to 2021 Class A Notes Trust Indenture‌A-1

EXHIBIT A: Form of 2021 Class A Notes Trust Indenture‌A-3

EXHIBIT B: Form of Fixed Series 2021 Class A Certificate‌B-1

EXHIBIT C: Form of Variable Series 2021 Class A Certificate‌C-1

EXHIBIT D: Application‌D-1

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YOU SHOULD RELY ONLY ON INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS. WE ARE OFFERING TO SELL AND SEEKING OFFERS TO BUY CERTIFICATE ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME THE PROSPECTUS MAY BE DELIVERED OR OF ANY SALE OF THE CERTIFICATE.

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INTRODUCTION

We have prepared this Prospectus so that you will have the information necessary to make your investment decision. Please read this Prospectus carefully. It describes the Class A Debt Certificates, the risks involved in investing in the Certificates, our Company and our business, and our financial condition. We refer to the registered owner of a Certificate as a “Holder”.

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FREQUENTLY ASKED QUESTIONS ABOUT THE CLASS A CERTIFICATES and this offering

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SUITABILITY STANDARDS

An investment in our Certificates is only suitable for persons who have adequate financial means and desire an investment in unsecured debt obligations for a term of the Certificate selected, from 12 months up to 60 months for the Fixed Series Certificates. All the Variable Series Certificates have a term of 60 months. In addition, an investment has limited liquidity, which means that it may be difficult for you to

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sell your Certificate. Persons who may require liquidity prior to the maturity of their Certificate or seek a guaranteed stream of income should not invest in our Certificates.

In consideration of these factors, we have established minimum suitability criteria for purchasers of Certificates. These minimum suitability eligibility criteria require that a purchaser of Certificates satisfy the following:

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In the case of sales to fiduciary accounts, one of the following must meet the suitability standards:

We and our selling agent, MP Securities, are responsible for determining if the Certificate purchasers meet these suitability standards for investing in our Certificates. In making this determination, the selling agent and we will rely on information provided by prospective Certificate purchasers. In addition to the minimum suitability standards described above, we and each authorized representative or any other person selling Certificates on our behalf, are required to make every reasonable effort to determine that the purchase of Certificates is a suitable and appropriate investment for each Certificate purchaser.

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In making this determination, your authorized representative or other person selling Certificates on our behalf will, based on a review of the information provided by you, including your age, investment objectives, income, net worth, financial situation, and other investments held by you, consider whether you:

Such persons must maintain records for at least six years of the information used to determine that an investment in the Certificates is suitable and appropriate for each investor.

Restriction Imposed by the USA PATRIOT Act and Related Acts

In accordance with the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA PATRIOT Act”), the Certificates offered by this Prospectus may not be offered, sold, transferred or delivered, directly or indirectly, to any “Unacceptable Investor,” which means anyone who is:

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PROSPECTUS SUMMARY

The following summary highlights selected information we have included in this Prospectus. It does not contain all of the information that may be important to you. Additional details about the Certificates, the Indenture, our business, and our operating data is contained elsewhere in this Prospectus. See also the section, “Frequently Asked Questions About The Certificates” on page 2. This section does not contain all of the information that is important to your decision whether to invest in the Certificates. We encourage you to read this Prospectus, including the section entitled “Risk Factors” commencing on page 21 and our Financial Statements starting at page F-1 of this Prospectus in their entirety before making an investment decision.

The Offering

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The Indexes

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Certificate Terms in General

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Plan of Distribution

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WARNING CONCERNING FORWARD-LOOKING STATEMENTS

Certain statements in this Prospectus, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are included with respect to, among other things, our current business plan, business strategy, and portfolio management. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results or outcomes to differ materially from those contained in the forward-looking statements. Important factors that we believe might cause such differences are discussed in the section entitled, “Risk Factors” or otherwise accompany the forward-looking statements contained in this Prospectus. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. In assessing all forward-looking statements, readers are urged to read carefully all cautionary statements contained in this Prospectus.

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RISK FACTORS

Carefully consider the risks described below before making your investment decision. Refer to the other information in this Prospectus, including our financial statements and notes to such statements.

Any of the following identified risks, along with other unidentified risks, or risks we believe are immaterial or unlikely, could harm the Company. The risks and uncertainties described below are not the only risks that may have a material, adverse effect on us. Additional risks and uncertainties also could adversely affect our business, financial condition, and results of operations. The risks discussed below include forward-looking statements, and our actual results may differ substantially from those discussed in these forward-looking statements. Investors should carefully consider the risks described below in conjunction with the other information in this Prospectus and the information incorporated by reference in this Prospectus.

Risks Related to the Offering and Company

Payment of the Certificates is not secured or guaranteed by any person.

Repayment of the Certificates is our exclusive obligation, and the Certificates are our sole responsibility and are not the obligation or responsibility of any other person. See “Description of the Certificates” on page 39. In general, as a Certificate holder, you will have no greater right to payment than that of our other general creditors. At December 31, 2021, we had $113.4 million of total liabilities of which $76.7 million consisted of various types of investor debt.

The Trustee may resign in the event we are in default on the Certificates.

The Trustee may resign as Trustee under the Indenture at any time upon notice, thereby requiring the appointment of a successor trustee in accordance with the Indenture. In such event, delays may result in the appointment of a successor trustee, which may, delay the Holders’ ability to pursue one or more remedies in the event we are declared in default under the Indenture.

The Indenture governs and restricts your rights as a Holder.

The Certificates are subject to the Indenture, which restricts and regulates your rights as a Holder. For example, in the event of our default, the Indenture allows you to seek remedies against us only through action by the Trustee. The Indenture requires a vote of the Holders to take certain acts on behalf of the Holders and that vote will bind all Holders. For example, the Indenture provides that in the event of our default, the Holders of 25% of the unpaid principal amount of the outstanding Certificates may declare the entire unpaid balance of the Certificates immediately due and payable. The Indenture requires a Majority in Interest Vote of the Holders to pursue collection of the Certificates and other remedies. The Indenture also provides that a Majority Vote of the Holders is required to adopt certain amendments and supplements to the Indenture and the Certificates, and to waive certain defaults, events of default, and/or to remove and replace the Trustee. The Indenture contains cross-default provisions whereby our default on one Series of the

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Certificates will constitute a default with respect to each other Series of Certificates. Thus, Holders suffering an actual default may be more inclined to take action against us than Holders who suffer only a technical default on their Certificates because of these cross-default provisions. Accordingly, where there is an actual default on one or more Series of Certificates constituting less than a majority of the unpaid principal balance of the outstanding Certificates, such Holders may not be able to obtain the approval of the Holders required to appoint a Trustee and pursue a remedy under the Indenture. In such event, you may have no practical recourse against us. See the “Description of the Indenture” on page 45.

BY EXECUTING YOUR PURCHASE APPLICATION, YOU AGREE TO BE BOUND BY THE TERMS AND CONDITIONS OF THE INDENTURE. YOU SHOULD CAREFULLY REVIEW THE INDENTURE WHICH IS ATTACHED AS EXHIBIT A TO THIS PROSPECTUS. YOU MAY NOT INSTITUTE OR CONTINUE ANY PROCEEDING, JUDICIAL OR OTHERWISE, WITH RESPECT TO YOUR CERTIFICATE, THE INDENTURE, OR THE APPOINTMENT OF A RECEIVER OR OTHER TRUSTEE OR FOR ANY OTHER REMEDY IN CONNECTION THEREWITH DURING THE PERIOD OF OPERATION OF THE INDENTURE, UNLESS CERTAIN CONDITIONS, AS SET FORTH IN THE INDENTURE, ARE SATISFIED.

We offer no assurance of granting a hardship prepayment if requested.

In general, the Certificates are redeemable prior to maturity upon request, but only in our sole discretion. Thus, Holders may not be able to redeem their Certificates prior to maturity, particularly during times when there are a considerable number of early redemption requests.

The Certificates are non-negotiable, and the Holder may not transfer the Certificate ownership without the Company’s prior written consent.

The Certificates are non-negotiable and are payable only to the person shown as the registered Holder on the records of the Company. The Holder, or any subsequent registered Holder, may transfer his or her Certificate, or any interest in that Certificate, only upon the prior written consent of the Company, which consent will not be unreasonably withheld.

There will be no market for your Certificate, and you must depend solely on our ability to repay your Certificate for liquidity of your investment.

You should be prepared to hold your Certificate to maturity, subject to any redemption right you may have under your particular Certificate. You have the right to tender your Certificate for prepayment at any time, for which we may charge an administrative fee of not more than three months of interest payable on the principal amount of the Certificate. However, our prepayment of your Certificate is voluntary, and you should not rely on our willingness or ability to do so. We cannot assure you that you will be able to sell your Certificate at a particular time or at all, or that the prices you receive when you sell them will be favorable.

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An independent rating agency has not rated the Certificates and there will be no sinking fund for repayment of the Certificates.

We have not obtained a rating for your Certificates from an independent rating agency, and we do not intend to request such a rating. Also, there will not be a sinking fund set up for the repayment of the Certificates and we must rely on our available cash resources to repay your Certificate when due. There is no assurance that we will have adequate cash resources available at the time the Certificates are due.

The Holders may need to appoint a successor or substitute trustee before they can pursue their remedies under the Indenture.

Under the Indenture, you and the other Holders may pursue your remedies in the event of our default or otherwise exercise your rights under the Indenture only through the Trustee. U.S. Bank Trust Company, National Association, is the Trustee. In the event the Trustee resigns or should the Holders desire to appoint a different Trustee, they may do so only with a Majority Vote. In addition, finding a suitable Trustee and obtaining the Majority Vote of the Holders could be time consuming and completion of this appointment process could significantly delay the Holders’ ability to exercise your rights under the Indenture. See the Description of the Indenture on page 45.

Under certain circumstances, a Majority Vote of the Holders may amend or supplement your Certificate or the Indenture without your consent.

In addition, by a Majority Vote, the Holders may approve the waiver of any default, event of default or breach of a covenant or other condition under the Certificate. Moreover, the Trustee has the power under the Indenture to compromise or settle any claims against us by the Holders and, if a Majority Vote of the Holders approves such compromise or settlement, the settlement or compromise would be binding on all Holders. IN ANY OF THESE EVENTS, YOU MAY BE WITHOUT PRACTICAL RECOURSE AGAINST US.

We have the right to repay your Certificate.

We have the right to prepay all or a portion of the Certificates if we give you at least thirty (30) days but not more than sixty (60) days prior notice. If we choose to redeem less than all the Certificates, we will redeem the Certificates on a pro-rata basis.

No independent appraisal or investment firm or advisor has determined the offering price for the Certificates.

We are issuing the Certificates at their face amount, i.e., at par. We have not determined the price of the Certificates based on any single or group of objective factors. We have not consulted an independent appraisal investment company or other expert or advisor, concerning the pricing of our Certificates. Therefore, there is no assurance that the yield you will receive from your Certificate is not lower than that which you could receive from similar investments from other issuers.

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There is no minimum amount of Certificates that we must sell before the Company uses the Offering proceeds.

Once an investor completes a Purchase Agreement and the subscription is accepted, the Company may immediately begin to use the funds for the purposes described in the Prospectus.

We may be unable to obtain sufficient capital to meet the financing requirements of our business.

Our ability to finance our operations and repay maturing obligations to our investors and credit facility lenders depends on our ability to raise funds from the sale of our debt securities. Factors that affect our ability to sell our debt securities include, but are not limited to:

Unexpected large withdrawals by investors that hold our debt securities can reduce our overall liquidity.

We continue to expand our methods of raising funds, including selling participations in our mortgage loan investments, expanding the sales of our debt securities, and maintaining lines of credit at financial institutions. If this strategy becomes less effective, we will need to find alternative sources of borrowing to finance our operations. Alternative solutions may be selling assets, deleveraging our balance sheet, and reducing operational expenses.

We depend on repeat purchases by a significant number of investors in our debt securities to finance our business.

A significant percentage of the investors who buy our debt securities roll their matured Certificate into a new debt security. Historically, we have been able to sustain a high rate of renewal investments. If the rate of repeat investments declines, our ability to maintain or grow our asset base could be impaired. The table below shows the renewal rates of our maturing debt securities over the prior three years:

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See the caption, “Debt Securities”, under the Liquidity and Capital Resources - “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for more information on our investor renewal rates.

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Some of our investors may be unable to purchase our public offered debt securities due to FINRA’s investor suitability rule.

When handling sales of our investor debt securities, we must comply with FINRA’s “know your customer” and “suitability” rule. Some investors may not qualify under suitability criteria we have established for investors. These suitability eligibility standards help ensure that investors make appropriate investments given the:

If MP Securities is unable to offer a potential investor a Class A Certificate that will enable such investor to meet the applicable suitability standards, we will need to find other qualified investors to implement our strategic objectives.

Our growth is dependent on leverage, which may create other risks.

We use responsible leverage, which means borrowing to invest in mortgage assets. This mechanism creates net interest income for the Company. Our Board of Managers has overall responsibility for our financing strategy. Our success is dependent, in part, upon our ability to manage our leverage effectively. Leverage creates an opportunity for increased net income, but at the same time creates risks. For example, leveraging magnifies changes in our net worth. We will incur leverage only when we expect that it will enhance our investment returns. To generate a quick sell on an asset, the asset often sells at a discount. There can be no assurance that we will be able to meet our debt service obligations; and, if we must quickly sell assets to meet our debt service obligations, we risk incurring a loss on of some or all those assets. Our management has been working on reducing the Company’s reliance on leverage by increasing revenue from non-balance sheet sources that do not require leverage, such as our broker-dealer commissions and loan servicing income.

A portion of our mortgage loans collateralizes our credit facilities; therefore, these pledged assets will be unavailable to meet our unsecured debt obligations.

Our term-debt credit facility and our lines of credit requires that we secure them with mortgage loans, keeping a minimum collateralization ratio on each credit facility. Loans pledged as collateral to the term-debt credit facility or lines of credit will be unavailable for other cash flow purposes, including meeting our unsecured debt obligations. As of the date of this Prospectus, we are in compliance with our minimum collateralization ratio covenants as required by our credit facilities.

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The following table shows the recorded balance of loans pledged and not pledged as collateral as of September 30, 2022 (dollars in thousands):

The loans pledged to satisfy collateral requirements for debt facilities will not be available to meet our unsecured debt obligations. Therefore, a default on one of our credit facilities could reduce the availability of other assets on our balance sheet, and adversely affect our liquidity and ability to repay our investor debt securities.

Our financing arrangements have covenants that restrict our operations and any default under these arrangements would inhibit our ability to grow our business, increase revenue, and make distributions to our equity investors.

Our financing arrangements have restrictions, covenants, and events of default. Failure to meet or satisfy any of these covenants could result in an event of default under these agreements. Our default under any of our financing arrangements could have a material, adverse effect on our business, financial condition, liquidity, results of operations, and our ability to make distributions to our equity investors. These restrictions also may interfere with our ability to obtain financing or engage in other business activities.

We may be unable to successfully implement our strategy to grow our mortgage loan and non-interest generating segments of our business.

Over the past decade, we have gradually decreased the total amount of mortgage loans on our balance sheet as part of an effort to reduce risk in the portfolio and dispose of or restructure non-performing loans. We have also implemented a strategic objective of transitioning to a more diversified financial services company that is focused on Christian stewardship. To effectively implement this strategy, we will need to increase our investment in technology, streamline our loan origination and underwriting process and become more efficient in carrying out the operations of the Company. We also intend to continue our strategy of offering additional financial products and services to our equity owners, strategic partners, and clients. Continuing to grow our business will depend, in part, on our ability to address the needs of our clients, borrowers, investors, and strategic partners by effectively using technology to provide products and services that will enable us to create additional efficiencies in our business and expand the scope of and volume of financial transactions we are able to complete.

Loss of our management team or the ability to attract and keep key employees could harm our business.

We are dependent on the industry knowledge, professional skillsets, institutional contacts, and overall financial services experience of our senior management team. We rely on our management team to develop

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relationships with current and potential clients and strategic business partners. We also rely on our management team to develop new products and services for our clientele, as well as the continued expansion of complimentary lines of business to diversify the Company’s value proposition further. We can give no assurances that we will be able to recruit and keep qualified senior managers that will enable us to achieve our core strategic aims and continue to grow our business profitably.

Our broker-dealer and investment advisory business depends on fees generated from the distribution of financial products and advisory fees.

One of our strategic goals is to increase non-interest revenues from fees generated from the distribution of financial products, such as managed accounts, mutual funds, and annuity products. Changes in the structure or amount of fees paid by sponsors of these products could directly affect our non-interest revenue. In addition, if these products experience losses or increased investor redemptions, the revenue we earn on these products may decline.

The ability to attract and keep qualified financial advisors and associates is critical to MP Securities’ continued success.

As we continue to expand our non-interest revenue sources, we will need to expand our team of qualified investment and financial advisors that complement the services we provide to our clients. If we are unable to recruit and keep qualified professionals, we could jeopardize our strategic goal of increasing non-interest income, thereby adversely affecting our net earnings and financial condition.

Our systems may experience an interruption or breach in security, which could subject us to increased operating costs as well as litigation and other liabilities.

We rely heavily on communications and information systems to conduct our business, process, send, and store electronic financial information. Any failure, interruption, or breach in security of these systems could result in failures or disruptions in our critical business systems. The secure transmission of confidential information over the Internet and other electronic transmission and communication systems is essential to keeping customer confidence in our services. Security breaches, computer viruses, acts of vandalism, and developments in computer capabilities could result in a breach or breakdown of the technology we use to protect customer and investor information and transaction data.

While we have policies and procedures designed to prevent or limit the effect of the possible failure, interruption, or security breach of our information systems, there can be no assurance that any such failure, interruption or security breach will not occur or, if they do occur, that they will be adequately addressed. We rely on third parties in processing our transactions. Any breakdown or failures of their systems or capacity constraints could adversely affect our operations. The occurrence of any failure, interruption, or security breach of our information systems could damage our reputation, result in a loss of a borrower, investor, or customer’s business, or expose us to civil litigation and possible financial liability.

Our critical business systems may fail due to events out of our control, such as:

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These events could potentially result in data loss and adversely affect our ability to conduct our business. As of the date of this annual report, to our knowledge, we have not experienced any material impacts relating to cyber-attacks or information system security breaches.

From time to time, we have engaged in transactions with related parties and our policies and procedures on these transactions may be insufficient to address any conflicts of interest that may arise.

Under our code of business conduct, we have set up procedures regarding the review, approval, and ratification of transactions that may give rise to a conflict of interest between us and a related party. A related party is any employee, officer, board member, equity owner, trustee, their immediate family members, other businesses under their control, and other related persons. In the ordinary course of our business operations, we have ongoing relationships and engage in transactions with several related entities. This includes transactions with our equity owners. Conflicts of interest are inherent in any transactions involving credit facilities, funds on deposit with, mortgage loans bought, sold, participated, or serviced in our dealings with our equity owners. While the Company believes that it has taken reasonable measures to mitigate any risks, these procedures may not be sufficient to address conflicts of interest that may arise.

Risks Related to the Financial Services Industry and Financial Markets

Deterioration of market conditions could negatively affect our business, results of operations, financial condition, and liquidity.

A number of factors that we cannot control affect the market in which we operate. These factors can have a potentially significant, negative impact on our business. These factors include, among other things:

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Significant declines in the value of real estate related assets, impairment of our borrowers’ ability to repay their obligations, and illiquidity in the markets for real estate related assets can adversely affect our mortgage loan investments, financial condition, and income.

The long-term impact of various external factors such as the COVID-19 pandemic, Russia’s invasion of Ukraine, increasing inflation, and continuing disruption of the global supply chains, and the impact of such factors on our church and ministry loans, cannot be known at this time.

The COVID-19 pandemic caused major disruptions in the U.S. economy and has caused churches, Christian schools, and ministries to make significant changes in the conduct of their operations, programs and in-person meeting schedules. In addition, Russia’s invasion of Ukraine, increasing inflation, and the disruption of global supply chains are putting strain on the U.S economy and the U.S. consumer. Our business relies, to a significant degree, on the ability of our ministry borrowers to make loan payments on a timely basis. At this time, we cannot know what the long-term impact of these economic stressors on our borrowers and their donors will be. A significant disruption in giving trends resulting from these factors could have a material impact on the timing of loan payments made by our borrowers, our liquidity, loan loss reserves, and our financial condition.

Declining real estate values could harm our operations.

We believe the risks associated with our business are more severe during periods in which an economic slowdown or recession is accompanied by declining real estate values. Declining real estate values often reduce the level of new mortgage loan originations, since borrowers often use increases in the value of their existing properties to support the purchase of, investment in, or renovation of their worship facilities. Borrowers may also have difficulty paying principal and interest on our loans if the real estate economy weakens. Further, declining real estate values significantly increase the likelihood that we will incur losses on our foreclosed assets and on our loans in case of default because the value of our collateral may be insufficient to cover our investment in such assets.

Any sustained period of increased payment delinquencies, foreclosures, or losses could adversely affect both our net interest income from loans as well as our ability to originate, sell, and securitize loans. These events would significantly harm our revenues, results of operations, financial condition, liquidity, and business prospects.

The Company is subject to interest rate risk.

Interest rate fluctuations and shifts in the yield curve may cause losses. Our primary interest rate exposures relate to our mortgage loan investments and floating rate debt obligations. Typically, our loan investments have a fixed interest rate with a five-year interest rate adjustment or maturity date. A portion of our borrowing arrangements with our investors, however, provides for variable rates of interest that are indexed to short-term borrowing rates or fixed rates on short-term maturities.

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Changes in interest rates, including changes in expected interest rates or “yield curves,” affect our business in multiple ways. Changes in the general level of interest rates can affect our net interest income. Net interest income is the difference between the interest income we earn on our interest-earning assets and the interest expense we incur on our interest-bearing liabilities. Changes in the level of interest rates also can affect, among other things, our ability to originate and acquire mortgages, and the market value of our mortgage investments. In the case of a significant rising interest rate environment, default by our mortgage loan obligors could increase our losses and negatively affect our liquidity and operating results.

Our ability to expand the size of our loan portfolio is dependent on our ability to obtain debt financing at rates that supply a positive net spread. We have used borrowing facilities obtained from institutional lenders and relied upon offerings of debt securities in SEC registered offerings and private placement offerings to fund our mortgage loans investments. Our ability to fund future investments will be severely restricted if spreads on debt financing widen or if availability of credit facilities ceases to exist. In addition, an increase in our borrowing costs could decrease the spread we receive on our mortgage loan investments, which could adversely affect our ability to pay interest and redeem the outstanding debt securities as they mature. To mitigate our interest rate risks, we have previously and may in the future enter into interest rate hedging transactions that include, but are not limited to, interest rate caps and interest rate swaps. We cannot guarantee the results of using these types of instruments to mitigate interest rate risks, and as a result, the volatility of interest rates could result in reduced earnings or losses for us.

In addition, increases in interest rates during the term of a loan may adversely affect a borrower’s ability to repay a loan at maturity or to prepay a loan. Our mortgage loans typically have large balloon payments due at maturity. When the loan matures and the balloon payment is due, the borrower must either pay the loan balance or refinance the loan with us or another lender. If interest rates are higher when the loan matures, the borrower’s payment on new financing may be higher. The borrower may not be able to afford the higher debt service hindering its ability to refinance our loan. In addition, the borrower may not be able to refinance the loan because the value of the property has decreased. If a borrower is unable to repay our loan at maturity, we could suffer a loss and we would not be able to reinvest proceeds in assets with higher interest rates. As a result, it could adversely affect our business and profitability.

Regulatory compliance failures could adversely affect our reputation, operating business, and core strategic goals.

We rely on publicly offered debt securities to fund a substantial part of our operations. As a result, we are subject to U.S. securities laws, rules, and regulations publicized by the SEC and applicable state securities statutes. Our subsidiary, MP Securities, is subject to oversight from the SEC, FINRA, the Department of Insurance, California’s Department of Financial Protection and Innovation, and securities regulators in the states where MP Securities conducts business. To the extent MP Securities engages in securities and insurance-related activities in a particular state, state securities and insurance administrators will have authority over the activities of our broker-dealer affiliated entity. As a registered broker-dealer and FINRA member, MP Securities must maintain registrations under the securities laws in those states in which it conducts business. The failure to follow obligations imposed by any regulatory authority binding on our

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subsidiaries or us or to keep any of the required licenses or permits could result in investigations, sanctions, and reputation damage.

Risks Related to Our Mortgage Loan Investments

We may need, from time to time, to sell or pledge as security our mortgage loan investments.

The market for church mortgage loans is specialized and therefore not as liquid as for a residential or commercial loan portfolio. As a result, in the event we need additional liquidity we may have difficulty in disposing of our mortgage loan portfolio quickly or at all. The amount we would realize is dependent on several factors, including the quality and yield of similar mortgage loans and the prevailing financial market and economic conditions. It is possible that we could realize substantially less than the face amount of our mortgage loans, should we be required to sell the loans or pledge them as collateral for debt. Thus, the amount we could realize for the liquidation of our mortgage loan investments is uncertain and unpredictable.

We are subject to risks related to prepayment of mortgage loans held in our portfolio, which may negatively affect our business.

Our borrowers may prepay the principal amount of their mortgage loans at any time. There is intense competition from financial institutions that are looking to make commercial loans at competitive rates to qualified borrowers. If a significant number of borrowers refinance their loans with other lenders, our profitability could be adversely affected.

We are subject to the risks associated with loan participations, such as less than full control rights.

We have sold participation interests in loans we have originated and service. We may need the consent of the parties to which we have sold the participation interest to exercise our rights under such loans, including rights with respect to amendment of loan documentation, enforcement proceedings in case of default, and the institution of, and control over, foreclosure proceedings. Similarly, a majority of the participants may be able to take actions to which we object but must comply with if our participation interest represents a minority interest. The lack of full control on participation interests sold may adversely affect our business.

Church revenues fluctuate and may substantially decrease during times of economic hardship and global pandemics.

To pay their loans, churches depend on revenues from church member contributions. Donations typically fluctuate over time for multiple reasons, including, but not limited to:

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When a mortgage loan is made to a church, the senior pastor usually plays a critical role in determining whether the loan will be repaid.

The senior pastor of a church ministry usually performs a critical role in the leadership, management, effectiveness of the church’s governance and conflict of interest practices, and continued viability of the church. A leadership crisis faced by a church that loses its senior pastor due to death, disability, resignation, or retirement can negatively affect the church’s ability to meet its debt service obligations on a mortgage loan we make.

The quality of our mortgage loans depends on consistent application of sound underwriting standards.

The quality of the mortgage loans in which we invest depends on the adequacy and implementation of sound underwriting standards as described in our Board adopted loan policy. To achieve our desired loan risk levels, we must properly observe and implement our underwriting standards, which may change depending on the state of the economy.

Because we primarily invest in specialized purpose mortgage loans, our loan portfolio is riskier than if it were diversified.

We are among a limited number of non-bank financial institutions specialized in supplying loans to evangelical churches and church organizations. Church and ministry mortgage loans secured by real properties generally secure our loans and the secondary market for these loans is regional and limited. Our mortgage loan agreements require that the borrower insure the property. This requirement secures the loan against liability and casualty loss. However, certain types of losses, those of a catastrophic nature such as earthquakes, floods or storms, health emergencies such as the COVID-19 pandemic, and losses due to civil disobedience, are either uninsurable or are not economically insurable. If an uninsured loss destroys a property, we could suffer loss of all or a substantial part of our mortgage loan investment.

Our loan portfolio is concentrated geographically and focused on loans to churches and religious organizations.

As of December 31, 2021, the Company had 13% and 26% of the outstanding balance of its loan portfolio located in the states of California and Maryland, respectively. Economic conditions in each of these states could differ in a significant manner from the loan investments we have made in other states and the real estate values which serve as collateral in those two states will depend, to a substantial degree, on the real estate markets in those markets.

We may suffer losses on loans due to not having all the material information relating to a potential borrower at the time that we make a credit decision with respect to that potential borrower or at the time we advance funds to the borrower.

There is typically no publicly available information about the churches and ministries to which we lend. Therefore, we must rely on our borrowers and the due diligence efforts of our staff to obtain the information that we consider when making our credit decisions. Our staff partially depends and relies upon the pastoral

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staff to supply full and correct disclosure of material information concerning their operations and financial condition. We may not have access to all the material information about a particular borrower’s operations, financial condition, and prospects. In addition, a borrower’s accounting records may become poorly kept or organized. The financial condition and prospects of a church may also change rapidly in the current economic environment. In such instances, we may not make a fully informed credit decision, which may lead to a failure or inability to recover our loan in its entirety.

We may be unable to recognize or act upon an operational or financial problem with a church in a timely fashion to prevent a loss of our loan to that church.

Our borrowers may experience operational or financial problems that, if not timely addressed by us, could result in a substantial impairment or loss of the value of our loan to the borrower. We may fail to identify problems because our borrowers did not report them in a timely manner or, even if the borrower did report the problem, we may fail to address it quickly enough, or at all. We try to minimize our credit risk through prudent loan approval and monitoring practices in all categories of our lending. However, we cannot assure you that such monitoring and approval procedures will reduce these lending risks. We also cannot assure you that our credit administration personnel, policies, and procedures will properly adapt to changes in economic or any other conditions affecting our borrowers and the quality of our loan portfolio. As a result, we could suffer loan losses that could have a material adverse effect on our revenues, net income, and results of operations.

We make assumptions about the collectability of our loan portfolio.

We make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of our loans. If we decide that it is probable that we will not be able to collect all amounts due to us under the terms of a particular loan agreement, we may have to recognize an impairment charge or a loss on the loan unless the value of the collateral securing the loan exceeds the carrying value of the loan.

If our assumptions regarding, among other things, the present value of expected future cash flows or the value of the collateral securing our loans are incorrect or general economic and financial conditions cause one or more borrowers to become unable to make payments under their loans, we may have to recognize impairment charges. These charges could result in a material reduction in earnings in the period in which the loans are determined to be impaired. The impairment may adversely affect, perhaps materially, our financial condition, liquidity, and ability to make debt service payments.

Some of our mortgage loan investments currently are, and in the future may be, non-performing loans or may be restructured, which subject us to increased risks compared to performing loans.

Some of the loans in our mortgage loan portfolio currently are, or in the future may become a non-performing loan. Such loans may become non-performing if the church falls upon financial distress, the community or congregation the church serves suffers financial hardship, or there is adverse change in leadership of the church. These circumstances could result in the borrower being unable to meet its debt

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service obligations to us. Non-performing loans may require our management team to devote a substantial amount of their resources to workout negotiations and restructuring efforts. These restructuring efforts may involve modifications to the interest rate, extension, or deferral of payments to be made under the loan or other concessions. For restructured loans, a risk still exists that the borrower may not be able or willing to continue the restructured payments or refinance the restructured mortgage at maturity. Our troubled assets could increase significantly if borrowers become delinquent and we are unsuccessful in managing our non-performing assets. This in turn could have a material, unfavorable effect on our results of operations and financial condition. As of December 31, 2021, $10 million, or 7.8% of our total assets, were deemed to be non-performing, as compared to $6.5 million, or 4.5%, at December 31, 2020.

In the event a borrower defaults on one of our mortgage loan investments, we may need to recover our investment through the sale of the property securing the loan.

In that event, the value of the real property security may prove insufficient to recover the amount of our investment. Even though we may obtain an appraisal of the property at the time we originate the loan, the property’s value could decline because of subsequent events, including:

The occurrence of any of these events could severely impair the market value of the security for our mortgage loan investments. In case of a default under a mortgage loan held directly by us, we will bear the risk of loss of principal to the extent of any deficiency between the value of the collateral and the principal and accrued interest of the mortgage loan. Foreclosure of a church mortgage can be an expensive and lengthy process, which could have a significant effect on our expected return on the foreclosed mortgage loan. Such delays can cause the value of the mortgaged property to deteriorate further. The properties also incur operating expenses pending their sale, including property insurance, management fees, security, repairs, and maintenance. Any added expenses incurred could adversely affect our ability to recover the full value of our collateral. In addition, if we foreclose on a mortgage loan and take legal title to the real property, we could become responsible for real estate taxes levied and assessed against the foreclosed property as well as other costs such as property maintenance and insurance costs. These costs would be our responsibility and could reduce our recovery on our investment.

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Risks of cost overruns and non-completion of the construction or renovation of the mortgage properties securing construction loans we invest in may have a material and adverse effect on our investment.

The renovations, refurbishment, or expansion by a borrower of a mortgage property involves risks of cost overruns and non-completion. Costs of construction or improvements to bring a mortgage property up to standards established for the market position intended for that property might exceed original estimates, possibly making a project uneconomical. Such delays and cost overruns are often the result of events outside both our and the borrower’s control such as material shortages, labor shortages, labor strikes, pandemics, and unexpected delays caused by weather and other acts of nature. In addition, environmental risks and construction defects may cause cost overruns, and completion delays. If the borrower does not complete such construction or renovation in a timely manner, or if it costs more than expected, the borrower may experience a prolonged impairment of the borrower’s revenues impacting their ability to make their payments on our loan.

The Company may experience losses or lower earnings if there is a drop in the real estate values that secure our mortgage loan investments.

From time to time, we have recorded additional provisions for losses related to real estate assets acquired after we carry out loan foreclosure proceedings. If we take ownership of a property as part of a foreclosure action, we could be required to write down the value of the property if the value of the property declines after we take title to the property. Further deterioration could lead to an increase in non-performing assets and reduced earnings.

Our reserves for loan losses may prove inadequate, which could have a material, adverse effect on us.

Although we regularly evaluate our financial reserves to protect against future losses based on the probability and severity of the losses, there is no guarantee that our assessment of this risk will be adequate to cover any future potential losses. As of December 31, 2021, our allowance for loan loss totaled $1.6 million or 1.65% of our total loans.

Unanticipated adverse events may result in reserves that will be inadequate over time to protect against potential future losses. Examples of these adverse events are:

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Maintaining the adequacy of our allowance for loan losses may require that we make significant and unanticipated increases in our provisions for loan losses, which would materially affect our results of operations and capital levels. See the section captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Prospectus for further discussion related to our process for determining the appropriate level for the allowance for loan losses.

We are exposed to environmental liabilities with respect to properties to which we take title.

In the course of our business, we may take title to real estate through foreclosure on one of our mortgage loan investments or otherwise. If we do take title to a property, we could be subject to environmental liabilities with respect to these properties. In such a circumstance, we may be held liable to a governmental entity or to third parties for property damage, personal injury, and investigation and clean-up costs incurred by these parties in connection with environmental contamination. In addition, we may be required to investigate or clean up hazardous or toxic substances, or chemical releases, at a property. The costs associated with investigation or remediation activities could be substantial. If we ever become subject to significant environmental liabilities, our business, financial condition, liquidity, and results of operations could be materially and adversely affected.

ESTIMATED USE OF PROCEEDS

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As the Class A Debt Certificates are sold, we will receive cash proceeds in varying amounts. No specific allocation of proceeds received from the Offering may be made given the timing of the sale of Certificates, loan payments made by our borrowers, redemption payments for maturing investor debt securities, and funding of new loans. For these reasons, we cannot provide a specific allocation of proceeds we will use for any specific purpose. However, we expect to use substantially all the net proceeds of the Offering as follows and in the following order of priority:

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There is no minimum amount of Certificates that must be sold to receive and use the proceeds from the sale of the Certificates, and we cannot assure you that all or any portion of the Certificates will be sold. Pending use of the net proceeds, we intend to invest them in a short-term, interest-bearing commercial account with a financial institution, which may be with one or more of our equity owners. There is no sinking fund to ensure repayment of the Certificates at maturity. As a result, investors will be dependent upon our ability to generate adequate cash flows from our business operations. For further discussion, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” on page 64 of the Prospectus.

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DESCRIPTION OF THE CERTIFICATES

Following is a summary of the material terms of the Certificates and the Indenture. It does not purport to be complete. This summary is subject to, and is qualified by reference in its entirety to, all the provisions of the Certificates and the Indenture. A copy of the Indenture is provided in Exhibit A to this Prospectus. Copies of the Fixed Series Certificate and the Variable Series Certificate are given in Exhibit B and Exhibit C, respectively, to this Prospectus. We urge you to read the forms of the Certificates and the Indenture because they, and not this description, define your rights as a Holder.

General

The Certificates are our general unsecured and unsubordinated obligations (except as described below). The Certificates rank equal in right of payment with our existing and future unsecured and unsubordinated indebtedness. Accrued interest and principal are payable on the Certificates at maturity.

The Certificates are issued subject to the Indenture, which is intended to constitute an indenture agreement as that term is defined under the Trust Indenture Act of 1939 (“1939 Act”). The Certificates have been registered under the 1939 Act, and the Indenture contains certain required protective provisions benefiting the Holders, as required by the 1939 Act. In addition, the Indenture contains certain financial covenants and restrictions on the payment of distributions to our Members and on our ability to incur other debt. Including the Certificates sold in this Offering, the Company is authorized to issue a total of $300 million of the Certificates under the Indenture.

The interest rates we pay on the Fixed Series Certificates are determined by reference to the CMT Index in effect on the date the interest rate is set. The interest rate we pay on the Variable Series Certificates is determined by reference to the Variable Index in effect on the date the interest rate is set. See “Descriptions of the Certificates- “The Indexes” on page 41 of the Prospectus.

The Fixed Series Certificates

Category and Required Minimum Purchase. The Fixed Series Certificates are offered in four Categories, each requiring a stated minimum purchase.

Interest Rate. The Fixed Series Certificates pay an interest rate equal to the sum of the Fixed Spread for the respective Fixed Series Certificate Category shown in the “Fixed Spread Grid” table below plus the CMT Index then in effect.

The Fixed Spread Grid is effective as of the date of this Prospectus and may be updated subsequently in additional supplements to the Prospectus. We reserve the right to change these spreads, effective as of the date of this Prospectus, either up or down, by a maximum of 200 basis points (or 2.0%, one basis point equals 0.01%). We will disclose any change in spreads in a supplement to this Prospectus. Because the economic environment is constantly changing, occasionally, we need to be able to adjust our spreads to

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remain competitive in the marketplace. As an example, the one-year CMT rate decreased from 1.45% on January 31, 2020 to 0.17% on March 31, 2020, due to the Federal Reserve Board and the market’s response to the COVID-19 pandemic. Subsequently, the Federal Reserve Board began raising rates starting early in 2022 and the one-year CMT rate increased from 0.39% on January 01, 2022 to 4.05% on September 30, 2022.

The Form of the Fixed Series Certificates is included as Exhibit B to this Prospectus.

Maturities. All Fixed Series Certificates are offered with maturities of 12, 18, 24, 30, 36, 42, 48, 54, and 60 months.

The Variable Series Certificates

Category and Minimum Required Purchase. The Variable Certificates are offered in three Categories, each requiring a stated minimum purchase.

Interest Rate. The Variable Series Certificates pay interest that is adjusted monthly in an amount equal to the sum of the Variable Index in effect on the adjustment date, plus the amount of the Variable Spread for the respective Category shown on the Variable Spread Grid set forth in the table below. We refer to this as the “Effective Variable Spread Grid”. The interest rate on the Variable Series Certificates will be adjusted monthly on a specified day each month, commencing the month following the date the Variable Series Certificate is issued.

Maturities. Variable Series Certificates have a maturity of 60 months.

Prepayment. We will prepay your Variable Series Certificate in whole or in part upon delivery to us of your written request, provided your Certificate had an unpaid principal balance of at least $10,000 during the immediately preceding 90 days.

The Variable Spread Grid displayed below is effective as of the date of the Prospectus. The Variable Series Certificates pay interest that is adjusted monthly in an amount equal to the sum of the Variable Index in effect on the adjustment date, plus the amount of the Variable Spread for the respective Category on the Effective Variable Spread Grid. We refer to this as the “Effective Variable Spread Grid”. The Effective Variable Spread Grid on a Certificate that has been purchased cannot change; however, we reserve the right to change these spreads, effective as of the date of this Prospectus, either up or down, by a maximum of 100 basis points (or 1.0%, one basis point equals 0.01%) for future investments. We will disclose any change in spreads in a supplement to this Prospectus. Because the economic environment is constantly changing, occasionally, we need to be able to adjust our spreads to remain competitive in the marketplace. As an example, the three-month LIBOR rate decreased from 1.75% on January 31, 2020 to 0.56% on April 30, 2020, due to the economic distress caused by the COVID-19 pandemic. Subsequently, the Federal Reserve Board began raising rates starting early in 2022 and the three-month LIBOR rate increased from 0.21% on January 01, 2022 to 3.75% on September 30, 2022.

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The Form of the Variable Series Certificate is included as Exhibit C to this Prospectus.

The Certificate Spread Grids

The tables below show the corresponding required minimum purchase amounts and the spreads for the Fixed Series Certificates and Variable Series Certificates, respectively. The grids below are effective as of the date of this Prospectus and may be updated subsequently in additional supplements to the Prospectus.

The Fixed Spread Grid

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The Variable Spread Grid

The Indexes

General. We reference the most recently published CMT Index in effect on the date the interest rate is set to determine the interest rates we pay on the Fixed Series Certificates. We determine the interest rate we pay on the Variable Series Certificates by reference to the most recently published Variable Index in effect on the date the interest rate is set. The interest rate for both the Fixed Series Certificates and the Variable Series Certificates is set on the first business day of the month unless that day is a holiday, at which time the rate will be set the next business day.

The CMT Index. The CMT Index refers to the Constant Maturity Treasury rates published by the U.S. Department of the Treasury for actively traded Treasury securities in over-the-counter trading transactions. The CMT Index is not reported for partial year obligations for Treasury securities with a maturity term that is greater than one year. For Fixed Certificates with a partial year term, we will calculate the CMT Index by interpolation. For example, for an 18-month Fixed Certificate, we will calculate the 18-month CMT Index by interpolating using the average of the 12-month CMT rate and 24-month CMT rate. For the 30-month Fixed Certificate, we will calculate the 30-month CMT Index by interpolating using the average of the 24-month

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CMT rate and 36-month CMT rate. U.S. Department of the Treasury also does not report 4-year CMT rates. For the 48-month Fixed Certificate, we will calculate the 4-year CMT Index using the average of the 36-month CMT rate and the 60-month CMT rate. For example, if the 12-month CMT rate was 2.50% and the 24-month CMT rate was 3.0%, then the 18-month CMT Index would be equal to 2.75%, the average of the 12- and 24-month rates. The current CMT rates can be reviewed at www.treasury.gov.

At September 30, 2022, the CMT Index rates published by the U.S. Department of Treasury provided:

The Variable Index. The Variable Index in effect when we issue a Variable Series Certificate is the LIBOR rate for three-month financial obligations in effect on the date the Variable Certificate is issued. The Wall Street Journal regularly reports the LIBOR rate. The Wall Street Journal can be accessed on the internet at www.wallstreetjournal.com. The three-month LIBOR reporting will end on June 30, 2023. We will replace with LIBOR rate with the SOFR effective as of July 1, 2023. The Federal Reserve Bank of New York establishes the SOFR, with adjustments made as deemed appropriate. For the 52-week period ended September 30, 2022, and as reported in The Wall Street Journal, the three-month LIBOR rate ranged from a low of 0.12% to a high of 3.75%.

Common Provisions of the Certificates

Priority of Right to Payment. The Certificates are generally equal in rank of payment with our other current and future unsecured debt, except debt which is expressly subordinated to the Certificates. Currently, we have an insignificant amount of such subordinated debt outstanding, but we intend to issue more in the future. While not expressly junior to our term-debt credit facilities, the Certificates are essentially junior in right to payment to these secured obligations with respect to payment from our assets securing them.

Payment of Interest. Unless you select the Interest Deferral Election option, interest is payable on all Certificates in arrears, monthly. The interest rates offered on the day of purchase will be confirmed by us upon request. You may change the way interest is paid on your Certificate by written notice to us. Interest is payable in arrears, on or before the 5th business day of the month immediately following the month in which payment is due. Interest will be prorated for the first partial payment period. Interest will be computed on the basis of a 365- or 366-day year. Interest will be deemed paid when mailed via the United States Postal Service addressed to the address the investor provides, subject to the check or instrument mailed being drawn on good and sufficient funds. You may change from one method of payment to another by giving us written notice by the 21^st day of the month in which you want the change to be effective.

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To be entitled to receive the interest effective on any day, an investor’s purchase of the Certificate must be confirmed and accepted by us on that day. An investor may choose to receive interest payable monthly or to reinvest interest, as described below.

Interest Deferral Election. Under this election, any Holder may choose to have the payment of accrued interest on their Certificate deferred and added to their Certificate’s principal balance. Only Holders who make this election will have interest added to their Certificate’s principal balance. From the date this election is made, all interest payments on the Certificate will be deferred and added to the Certificate’s principal balance. The Certificate’s principal balance, including deferred interest, will accrue interest under the terms of the Certificate. Interest so deferred will not be kept in a separate account but will be treated by us in the same manner as the unpaid principal amount of the Certificates.

Investors who are subject to taxation who make the Interest Deferral Election option should be aware that they will continue to have tax liability for all accrued interest in the year it is accrued and added to the Certificate’s principal balance. See “Certain U.S. Federal Income Tax Considerations” beginning on page 110 of the Prospectus.

Our Right to Prepay the Certificates. We may elect at any time to prepay all or a portion of the Certificates upon at least thirty (30) days and not more than sixty (60) days’ written notice. The redemption price will be the unpaid principal balance of the Certificate, plus accrued and unpaid interest thereon, through the redemption date. If less than all the Certificates can be redeemed, we will redeem the Certificates on a pro rata basis. We will mail a notice of our election to prepay the Certificate by first class mail to each Holder to be redeemed at the most recent address the Holder has provided us in writing. If any Certificate is to be redeemed in part only, the notice of redemption that relates to such Certificate shall state the portion of the principal amount thereof to be redeemed. A new Certificate in principal amount equal to the unredeemed portion thereof shall be issued in the name of the Holder thereof upon cancellation of the original Certificate. On and after the redemption date, interest ceases to accrue on Certificates or portions of them called for redemption. Our obligation to make partial or total redemptions on a pro rata basis will not limit our right to repurchase any Certificate on a voluntary basis, including any prepayment of a Certificate upon an investor’s request as described below.

Presentment of Certificates for Early Payment. A Holder may request that we voluntarily prepay his or her Certificate at any time by delivering a written request for early payment of the Certificate to us at our business offices. We may grant or deny the request in our sole discretion. Our current policy is to grant a reasonable request by reason of a demonstrated bona fide hardship, subject to availability of funds, but there is no assurance we will continue this policy. We must determine whether to purchase a Certificate so presented within ten (10) business days of our receipt of the request to do so and will, in such event, promptly pay to the requesting Holder the purchase price. In the event we agree to prepay the Certificate as requested, we may deduct an administrative charge equal to up to 3 months’ interest on the amount of the principal prepaid. If the Holder holds the Certificates in an individual retirement account (an “IRA”), the investor may incur additional withdrawal penalties, fees, and/or taxes.

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Registration of Certificates

The Certificates that we settle directly with an investor will be issued in book-entry form, which means that no Certificate or physical Certificate is created. All purchases will be made by and through the Company’s wholly owned subsidiary, MP Securities, or through a platform that permits purchases to be made using MP Securities as the selling agent.

Payment History of Our Investor Debt Securities Programs

We have sold our investor debt securities in numerous offerings in our more than thirty-one years of operations. Since inception, the Company has offered 15 prior debt investment programs, 14 of which were public offerings. Each of these programs has been liquidated. That is, each investor received timely payment of all interest and principal payments on the debt security we sold them within the time period set forth in their offering materials.

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DESCRIPTION OF THE INDENTURE

General

We may issue up to an aggregate of $300 million of the Certificates under the Indenture. However, we may not issue any Certificate if, after giving effect to such issuance, the Certificates then outstanding would have an aggregate unpaid balance exceeding $175 million.

As a condition to your purchase of a Certificate, you agree to adopt and become a party to the Indenture. The Indenture is a contract between the Holders, ourselves, and the Trustee. As required by U.S. federal law, the Certificates are governed by the Indenture, which we intend to constitute an indenture under the 1939 Act. We have filed the Indenture as an exhibit to the registration statement of which this Prospectus is a part. The terms and conditions of the Certificates include those stated in the Indenture and those made a part of the Indenture by reference to the 1939 Act.

The Trustee

The Indenture appoints U.S. Bank Trust Company, National Association as Trustee. The Trustee has two main roles under the Indenture:

In general, the Holders may direct the Trustee to act or abstain from acting by a Majority Vote. Again, as used in this Prospectus, “Majority Vote” means the vote or consent of a Majority in Interest of the Holders as defined in the Indenture.

Successor Trustee, Trustee Eligibility

The Trustee may not be an affiliate of the Company and must at all times meet the requirements of a trustee under the 1939 Act. Among other things, the 1939 Act requires a trustee to have a combined capital and surplus of not less than $150,000.

Compensation of the Trustee

The Trustee is entitled to base compensation, plus additional compensation for services it may perform at the direction of the Holders under the Indenture. Also, the Trustee has the right to be reimbursed for its costs and expenses. Pursuant to the Indenture, the Trustee agrees to look only to us for payment of its compensation and expenses.

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The Trustee’s Rights, Duties and Responsibilities

The Trustee represents the interests of all the Holders pursuant to the Indenture. As described in the following sections, the Trustee may not take specified actions without the direction, authorization, or approval of a representative (the “Holder Representative”) who is to be appointed by a Majority Vote of the Holders. If no Holder Representative is appointed, the Trustee must act as directed by a Majority Vote of the Holders. Thus, the Indenture requires Holders who suffer an actual default on their Certificates to obtain the consent of a Majority Vote of the Holders, regardless of Series or maturity or default status, or whether they have suffered an actual default, to require the Trustee to take action against us. THIS REQUIREMENT, IN EFFECT, MAY LEAVE MANY HOLDERS WITHOUT PRACTICAL RECOURSE.

NO HOLDER SHALL HAVE THE RIGHT TO INSTITUTE OR CONTINUE ANY PROCEEDING, JUDICIAL OR OTHERWISE, WITH RESPECT TO THE INDENTURE, THE CERTIFICATES, OR FOR THE APPOINTMENT OF A RECEIVER OR TRUSTEE OR FOR ANY OTHER REMEDY HEREUNDER, DURING THE PERIOD OF THE OPERATION OF THE INDENTURE, UNLESS CERTAIN CONDITIONS, AS SET FORTH IN THE INDENTURE, ARE SATISFIED.

BY EXECUTING THE APPLICABLE PURCHASE APPLICATION, EACH HOLDER IS AGREEING TO BE BOUND BY THE TERMS OF THE INDENTURE SHOULD IT COME INTO FORCE BY THE APPOINTMENT OF A TRUSTEE PURSUANT TO ITS TERMS. EACH PROSPECTIVE INVESTOR SHOULD CAREFULLY REVIEW THE INDENTURE (ATTACHED AS EXHIBIT A). THE FOREGOING IS ONLY A SUMMARY OF THE PROVISIONS OF THE INDENTURE.

In general, the Indenture requires the Trustee to exercise its rights and powers vested in the Indenture using the same degree of care and skill as a prudent person would exercise or use acting in like capacity in the conduct of an enterprise of like character with like aims to accomplish the purposes of the trust as determined by the Indenture. However, no provision of the Indenture may be construed as to relieve the Trustee from liability for its own grossly negligent action or grossly negligent failure to act or its own willful misconduct.

The Trustee will not be liable for exercising its rights and powers under the Indenture in certain circumstances including, but not limited to:

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The Trustee may refuse to take any action if it is required to advance, expend, or risk its own funds or otherwise incur financial liability in connection with any such action or in the exercise of any of its powers under the Indenture. The Trustee shall have no duty to take any action whatsoever if it believes in good faith that taking such action may expose it to personal liability. The Trustee assumes no responsibility for the legal enforcement of the Certificates or the Indenture.

Under the Indenture, the Trustee does not authenticate the Certificates. The Trustee does not collect interest or principal of the Certificates on behalf of the Holders, except in the event of a default where the Trustee is directed to do so by a Majority Vote of the Holders.

Our Continuing Covenants Under the Indenture

Limits on Our Payment of Distributions to Members

While any Certificate is outstanding, we may not make, and will not permit any subsidiary to make, a restricted payment unless no default or event of default has occurred and is continuing or would occur as a consequence of making the restricted payment, and certain other conditions are met. For this purpose, a restricted payment means: (i) a declaration or payment of any distribution to our equity owners (other than distributions payable in our membership interests to us or to our wholly owned subsidiary); (ii) any payment for the acquisition, redemption or retirement of our membership interests or that of any wholly owned subsidiary; or (iii) any voluntarily purchase, redemption or repayment, prior to its scheduled maturity of any of our indebtedness that is subordinated in right of payment to the Certificates.

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In addition, any such restricted payment, together with the aggregate of all other restricted payments we might make, may not exceed the sum of:

However, under the Indenture the following are not defined as restricted payments:

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For the purposes of the Indenture, our “net income” means the aggregate of our net income for the applicable period, on a consolidated basis, determined in accordance with accounting principles generally accepted in the United States of America.

Limits on Our Ability to Incur Debt

While any Certificate remains outstanding, we may not, and may not permit any subsidiary to, directly or indirectly, create, incur, issue, assume, guaranty or otherwise become, directly or indirectly, liable with respect to (collectively, “incur”) any indebtedness, unless our fixed charge coverage ratio for our most recently ended four full fiscal quarters immediately preceding the date on which such additional indebtedness is incurred would have been at least 1.20 to 1.0. We calculate the fixed coverage ratio as if the additional indebtedness had been incurred at the beginning of the period. Notwithstanding this restriction, we may incur indebtedness that: (i) is evidenced by the Certificates; (ii) existing on the last day of the calendar

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quarter last ending before the effective date of the Indenture, as such Indebtedness may be later extended or modified; (iii) is incurred in the ordinary course of business for the funding of mortgage loans which includes warehouse lines of credit and/or repurchase facilities; (iv) is in respect of performance, completion, guaranty, surety and similar bonds, banker’s acceptances or letters of credit provided by us in the ordinary course of business; and/or (v) when incurred does not result in other indebtedness, other than amounts we owe on the Certificates, 2021 Class A Notes, Class 1A Notes, and Class 1 Notes, to exceed $20.0 million immediately after we incur the indebtedness.

Under the Indenture:

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The Effect of Our Merger, Consolidation or Sale of Assets

While any Certificate is outstanding, we may not consolidate or merge with or into any other person or entity (whether or not we are the surviving entity) or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of our properties or assets (excepting sales of our loans we hold for sale in our normal course of business), in one or a series of transactions for the same purpose, unless (i) we are the surviving entity of such transaction; or (ii) if we are not the surviving entity, the surviving entity assumes our obligations under the Certificates by agreement or operation of law.

Requirements That We Maintain a Minimum Tangible Adjusted Net Worth

In the event that our tangible adjusted net worth is less than the minimum tangible adjusted net worth, within 55 days after the end of any fiscal quarter we must notify the Holders. We must within sixty (60) days thereafter restore our tangible adjusted net worth to an amount greater than the minimum tangible adjusted

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net worth. For the purposes of this covenant, tangible adjusted net worth includes the amount of our credit facilities to the extent it is subordinated in right to payment on a current basis to the Certificates.

Under the Indenture, our “tangible adjusted net worth” means our adjusted net worth less our intangible assets, if any. Our “adjusted net worth” means the sum of (i) our Members’ consolidated equity and of the equity interests of any consolidated subsidiary, plus (ii) the amount of any credit line, whether or not then funded, to the extent such loan amount is expressly subordinated in right to payment on a current basis to the Certificates.

Requirements That We Keep Certain Books and Records

We must keep proper books of record and account, in which full and correct entries shall be made of all dealings or transactions of or in relation to the Certificates and our business and affairs in accordance with accounting principles generally accepted in the United States of America. We must furnish to the Trustee any and all information related to the Certificates as the Trustee may reasonably request and which is in our possession.

Other than the foregoing, there are no covenants or other provisions (except those contained under the California limited liability company law which apply to corporations generally) restricting our ability to enter into transactions with our Affiliates including, but not limited to, transactions involving the sale, lease, transfer or other disposal of any of our assets to, or purchase any assets from, or any contract, agreement, understanding, loan, advance of guarantee with, or for the benefit of, any such Affiliate.

Under California law, our independent Managers’ fiduciary obligations require that they act in good faith under the duties of due care and loyalty in a manner which they believe to be in our best interests and those of our Members, which is not, in most circumstances, the same as the obligation they owe to the Holders.

Requirements That We File Certain Reports with the SEC

To protect the interests of the Holders, the Company agrees to file annual reports on Form 10-K and quarterly reports on Form 10-Q with the SEC, with exhibits as required to be filed with the SEC for companies required to make such filings under Section 13 or 15(d) of the 1934 Act. Pursuant to the terms of the Amendment No. 1 to the 2021 Class A Trust Indenture entered into on October 28, 2022, the Company is required to file these reports with the SEC even if the SEC does not require it to do so.

Remedies in the Event of Our Default

Each of the following constitutes an event of default under the Certificates:

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The Indenture provides that a default by reason of any of the foregoing Events of Default is a default with respect to all of the Certificates.

In order to cure payment in default, we must mail to the Holder, direct deposit or credit, if that option is selected, the amount of the nonpayment plus a late payment penalty equal to simple interest on the amount unpaid at the rate of 10% per annum, measured from the date the payment should have been mailed, deposited or credited pursuant to the terms of the Certificates until the date it actually is mailed, deposited or credited.

If any event of default occurs and is continuing, the Holders holding at least 25% of the principal amount of the Certificates may instruct the Trustee to declare the outstanding Certificates to be immediately due and payable and to take any action allowed by law to collect such amounts. Notwithstanding the foregoing, in the case of an event of default arising from our bankruptcy or insolvency, all outstanding Certificates will become due and payable without further action or notice. If an event of default has occurred and is continuing, we must, upon written request of the Trustee, cure such default and pay for the benefit of the Holder the whole amount then due, any penalties which may be due and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and all other amounts due to the Trustee. If we fail to cure such defaults and pay such amounts forthwith upon such demand, the Trustee, in its own name and as Trustee of an express trust, shall be entitled to sue for and recover judgment against us and any other obligor on the Certificates for the amount so due and unpaid pursuant to the terms of the Certificates.

Compromise or Settlement of Claims

The Trustee may not settle or compromise any rights or claims of the Holders, including any right to payment of principal or interest, unless the settlement or compromise is approved by a Majority Vote of the Holders. Any settlement or compromise so approved would be binding upon all the Holders.

The Trustee may withhold from the Holders notice of any default or event of default if it believes that withholding notice is in their interest, except a default or event of default relating to the payment of principal, interest or penalties.

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Amendment, Supplement and/or Waiver of the Indenture

The Indenture and/or the Certificates may be amended or supplemented by a Majority Vote of the Holders. Also, by a Majority Vote, the Holders may consent to waive any default, event of default, compliance or noncompliance with any provision of the Certificates. However, any such amendment, supplement or waiver affecting the term, interest rate and other terms of the Certificates must be ratable and proportionate in effect on all Holders based on the aggregate amount of principal and interest and penalty payments due them.

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MANAGEMENT’S DISCUSSION AND Analysis of Financial Condition and Results of Operations

SAFE HARBOR CAUTIONARY STATEMENT

This Prospectus contains forward-looking statements regarding Ministry Partners Investment Company, LLC and our wholly owned subsidiaries, Ministry Partners Funding, LLC, MP Realty, and MP Securities, LLC, including, without limitation, statements regarding our expectations with respect to revenue, credit losses, levels of non-performing assets, expenses, earnings and other measures of financial performance. Statements that are not statements of historical facts may be deemed to be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “estimate,” “expect,” “plan,” “intend,” “should,” “seek,” “will,” and similar expressions are intended to identify these forward-looking statements but are not the exclusive means of identifying them. These forward-looking statements reflect the current views of our management.

These forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties that are subject to change based upon a range of factors (many of which are beyond our control). Such risks, uncertainties and other factors that could cause our financial performance to differ materially from the expectations expressed in such forward-looking statements include, but are not limited to, the risks described in this Prospectus. See “RISK FACTORS” on page 21 of this Prospectus.

As used in this Prospectus, the terms “we”, “us”, “our” or the “Company” means Ministry Partners Investment Company, LLC and our wholly owned subsidiaries, MPF, MP Realty, MP Securities, and MPC.

INCORPORATE BY REFERENCE

The information disclosed below in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” is as of December 31, 2021, except for the “Recent Developments” and “Credit Facilities” sections under the “Liquidity and Capital Resource” heading, which provides certain information as of September 30, 2022. Please refer to our quarterly reports on Form 10-Q which we incorporate by reference into this document, including any future filings of our annual, quarterly, and current reports. See the section on “Incorporation by Reference” in this Prospectus for more information on how to view these reports.

Links to our most recently filed Quarterly Reports on Form 10-Q are below:

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OVERVIEW

We generate our revenue through our lending portfolio and through fees generated from our investment and insurance products and services. While we generate most of our revenue through interest income, our strategic aim is to diversify our revenue sources so that non-interest income becomes a larger percentage of total income. Producing revenue from multiple sources may reduce the risk to the Company if we experience a decrease in interest income. We also strive to improve operating efficiency by increasing the revenue generated for each dollar of expense incurred to run the business, which helps us improve our capital position. Increased capital helps mitigate risk in economic down cycles. In addition, we reduce risk to our lending revenue by improving the quality of our loan portfolio, assessing the financial strength of our borrowers, and collaborating with borrowers to restructure, refinance, and/or liquidate these investments when necessary.

To continue to achieve our goals, protect the investment made by our debt security holders, and maximize the value of our equity holders’ investment, we will continue to focus on:

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COVID-19 Impact on the Company’s Business

Although COVID-19 pandemic forced individuals, businesses, churches, and the ministries we serve to adjust the way they conduct their activities, management does not believe the pandemic has caused any material adverse impact on the Company’s financial position or ability to conduct any aspect of its business. However, the long-term impact of the pandemic remains unknown on our borrowers, investors, and clients. The Company will continue to monitor the impact of COVID-19 on the individual and corporate entities we serve.

Financial Performance Summary for the Two-Year Period ended December 31:

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Summary of Financial Performance

For the year ended December 31, 2021, we earned net income of $1.9 million. While net income was down $266 thousand over the prior year, owners’ equity increased by $1.6 million, resulting in the highest total amount of members’ equity in the Company’s history. The calendar years ended 2021, 2020, and 2019 are the Company’s three most profitable years since starting operations. The main cause of the net income in 2021, as well as in 2020, was a $2.4 million gain, in each year on debt extinguishment realized by using cash to pay down a portion of our term debt at a discount. The Company derived this substantial income by strategically shrinking our loan portfolio to generate cash to extinguish the debt. While the smaller loan portfolio will produce less net interest income going forward, management determined the gains received on debt extinguishment outweighed any lost future income. Management will continue to evaluate opportunities to pay down our term debt if it is in the best interests of the Company and its strategic goals.

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Non-interest income increased by $155 thousand to $3.6 million for the year ended December 31, 2021. The increase was mostly due to a $116 thousand increase in broker-dealer commissions and fees. The increase was due to expanding relationships with strategic partners and clients and generating additional fees arising from investments made by our clients.

Non-interest expense decreased by $88 thousand mostly due to a reduction in salaries and benefits due to staffing changes. Conversely, net interest income after provision for loan loss decreased by $509 thousand due to a reduction in the average loan portfolio.

Progress on Strategic Objectives

In 2021, we continued making progress towards our strategic objectives of diversifying our revenue streams, improving the quality of our loan portfolio, maintaining our balance sheet size, and improving operating efficiency. The following discussion focuses on each of these strategic objectives.

Diversified revenue streams

The Company’s management team believes that it will be able to use its capabilities in lending, servicing, and providing investment advisory services to supplement its net interest income with fee income. Our primary sources of recurring non-interest income are:

Loan portfolio quality

Historically, when the Company has reported a net loss for the year, the primary reason for the loss has been due to losses on our loan investments or from reserves taken from provisions for loan losses. In subsequent years, the Company may have benefited from recoveries when the loans paid off, the Company disposed of the collateral properties, or when the Company sold the promissory notes or loans. Therefore, the resolution of non-performing loans may contribute either positively or negatively to the Company’s financial results. During the year ended December 31, 2020, the Company sold an impaired loan to recoup its recorded investment in the loan. During the year ended December 31, 2021, the Company sold a REO property which resulted in a gain on sale of $44 thousand.

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We continue to carefully watch our loan portfolio and work with borrowers to minimize losses on our mortgage loan investments. The Company can often find a solution for borrowers who are in distress, but who are willing and able to work out a compatible solution. These efforts became more important in 2021 as we saw our classified loans increase by $3.5 million to $9.7 million thousand at December 31, 2021 as compared to December 31, 2020. This increase was because of three loans becoming impaired due to the borrowers experiencing financial distress.

As part of our strategic decision to reposition our loan portfolio, we have continued to focus on originating lower balance loans made to ministries where we can achieve yields that are more favorable. This allows us to avoid deteriorating our margins while reducing overall risk exposure to any one borrower. However, we also originate larger loans when we can find participants to buy a participation interest in the loan. Servicing loan participations generates servicing fee income while allowing us to reduce our risk exposure on the loan. We believe we have found a good mix in loan size that allows us to take advantage of quality lending opportunities. Our average net loan balance (recorded balance) was $783 thousand on December 31, 2021. We believe the relationships we have formed with credit unions throughout the United States will enable us to increase the amount of loan participation interests we sell and service for others.

Maintaining balance sheet size

Our strategy in recent years focused on keeping our balance sheet size flat rather than grow it as we directed more resources into improving the quality of our existing loan portfolio. However, during the year ended December 31, 2020, we took advantage of an opportunity to pay off a term-debt credit facility with a $15.0 million outstanding principal balance at a discount. While paying off the loan reduced our balance sheet, we were able to increase our capital by realizing a $2.4 million gain on debt extinguishment, improving net interest margin, and eliminating the ongoing cash flow requirements that would otherwise been required to be paid to service the debt. On March 5, 2021, we made a discounted prepayment of $14.3 million on our remaining term-debt credit facility.

Recent Developments

On January 6, 2022, we made another discounted prepayment of $15 million on our term-debt credit facility and made two more payments of $3.0 million each on June 30, 2022, and September 30, 2022. We believe that making these additional discounted payments on our term–debt credit facilities strengthens our net capital and positions the Company for future growth.

Improved operating efficiency

In the last several years, we have improved our operating efficiency. In 2021, we had non-interest expense of $4.9 million, a decrease of $88 thousand from $5.01 million in 2020. The decrease for the year ended December 31, 2021, is attributable to reduced employee expense due to staffing changes. For the year ended December 31, 2022, we expect to increase our investment in personnel, technology, and operating systems to expand the products and services we offer as well as improve our customers’ digital experience. While we expect our operating expense to increase in the next few years, we believe that the added capital investments will allow us to deliver better products and services in a more efficient manner in the future.

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Financial Condition

The following discussion and analysis compares the results of operations for the twelve months ended December 31, 2021 and 2020 and should be read in conjunction with the accompanying consolidated financial statements and notes thereto.

Comparison of Financial Condition at December 31: