Business context and reporting period
FatPipe, Inc. (Nasdaq: FATN) reported on October 7, 2026, that it refinanced its Fortis Bank SBA loan and entered into new credit facilities with KeyBank. The agreements are dated September 30 and October 1, 2026; the refinancing and repayment occurred October 1.
Financing and key terms
- Term loan: $4.5 million, maturing October 1, 2029. It requires 35 monthly principal payments of $75,000 beginning November 1, 2026, plus monthly interest; remaining principal and accrued interest are due at maturity.
- Revolving facility: Up to $1.5 million for working capital, maturing September 30, 2027. Monthly interest payments begin November 1, 2026; principal and unpaid interest are due at maturity.
- Interest rate: Both facilities bear interest at Adjusted Daily SOFR Index plus 3.00%. FatPipe estimates this is about 110 basis points below the former Fortis loan rate of Prime plus 1.00%, based on benchmark rates at refinancing. Actual savings depend on rates and balances.
- Use of proceeds: Approximately $4.47 million of term-loan proceeds repaid the Fortis loan in full, terminating that obligation.
- Fees and prepayment: Origination fees are $22,500 for the term loan and $7,500 for the revolver. Either facility may be prepaid without penalty, but loan fees and prepaid finance charges are nonrefundable.
Material changes, covenants and risks
The refinancing replaces the Fortis SBA loan with a $4.5 million term loan and adds a revolving borrowing facility of up to $1.5 million. The filing does not provide a clear value for the Fortis loan’s total payoff beyond the approximately $4.47 million repayment, nor does it state whether or how much has been drawn on the revolver.
The facilities are guaranteed by wholly owned subsidiary FatPipe Technologies, Inc., and secured by substantially all personal property assets of FatPipe and the subsidiary, including intellectual property. Quarterly financial covenants require Total Funded Debt to EBITDA of no more than 2.50:1.00 and a Fixed Charge Coverage Ratio of at least 1.20:1.00. Other covenants restrict, among other things, additional debt, liens, acquisitions, investments, asset dispositions, dividends and share repurchases. Defaults may allow KeyBank to stop further advances and accelerate obligations; default interest increases by 3.00 percentage points, subject to applicable law.
Management’s expected borrowing-cost reduction and ability to comply with covenants are forward-looking and depend on benchmark rates, future performance and borrowing needs. The filing contains no revenue, profit, cash-flow, margin or broader liquidity results.
Important facts for investors to verify
- Review the full loan documents filed as Exhibit 10.1 for covenant definitions, testing terms, collateral scope, default provisions and conditions on revolver availability.
- Verify actual revolver borrowings, remaining availability and total debt outstanding after the Fortis repayment.
- Compare realized interest expense and benchmark rates with management’s estimated 110-basis-point reduction.
- Monitor quarterly covenant compliance and the term-loan amortization and revolver maturity dates.