TriLinc Distribution Freeze Reaches 2.5 Years as Fund Liquidates Bad Loans
Editor’s Correction: A previous version of this article stated an incorrect fair value position for Cevher International B.V. as of June 30, 2026. It has been corrected to nearly $9.99 million.
TriLinc Global Impact Fund LLC, a publicly registered nontraded limited liability company, has gone two and a half years without paying a distribution to its unitholders, and the private impact-lending fund said it has no plans to resume – even as its board frees up cash from two long-distressed loan settlements to pay about $2.5 million of pending redemptions.
TriLinc disclosed this week that its board waived, for the third quarter, a policy that otherwise limits unit repurchases to cash raised through its distribution reinvestment plan. The waiver frees up other available liquidity, including recent settlement proceeds, to process pending repurchase requests tied to unitholder deaths and disabilities. Those requests total approximately $2.5 million, based on TriLinc’s per-unit net asset value as of June 30, 2026. TriLinc said it does not currently intend to resume regular unit repurchases or the payment of cash distributions “as a result of these settlements or otherwise.”
Regular monthly distributions stopped after June 2023. TriLinc paid two special distributions in February and March 2024, then none since. The company has said it “cannot provide any assurances as to when or if” it will pay distributions again. Its unit repurchase program has been suspended over the same stretch, with death and disability requests the only exception; TriLinc has acknowledged that if unitholders could sell their units at all, it would likely be “at a substantial discount,” and that its units “will not be listed on an exchange for the foreseeable future, if ever.”
The freeze has coincided with a broader pullback. TriLinc made no new investments in 2024 or 2025 and issued no new units in either year, despite maintaining an effective registration statement and continuing to file prospectus supplements as recently as August. The fund has also stopped making further investments through two of its sub-advisers. Total portfolio value, at fair value, fell to $262.2 million at the end of 2025 from $268.4 million a year earlier, with 22 positions on TriLinc’s internal watch list. The fund’s largest holding, a Mexican waste-to-fuels processor paying 20% payment-in-kind interest, has grown to 27% of the portfolio from 21.6% a year earlier; the five largest positions together make up 57.5%.
Several watch-list positions are already in default: a Hong Kong-based commodities trader marked down by roughly a third, a Botswana small-business lender marked down by more than two-thirds, and a Kenyan freight and cargo transporter marked down by nearly 80%. A cluster of Argentine positions traces to a former sub-adviser, IIG Trade Opportunities Fund B.V., which served as sub-adviser on five of the 22 watch-list investments – 6.9% of the portfolio by fair value at the end of 2025. TriLinc said IIG “failed to provide us with complete and accurate information” about those holdings and, in 2017, “sold us a $6 million participation in a loan that did not exist.”
The two settlements behind this quarter’s redemptions took years to reach. TriLinc funded an $8.275 million loan participation in February 2019 with Cevher International B.V., a Netherlands-domiciled holding company for a Turkish aluminum wheel manufacturer. The borrower ran into trouble in 2024 after inflation in Türkiye hit 68.5% and the factory’s union pushed through wage increases. TriLinc and Cevher signed a discounted settlement term sheet in September 2025; a prospective strategic investor who was to help fund the payout withdrew in January, and the parties negotiated an amended settlement. The position, carried at approximately $11 million at the end of 2025, was marked down to nearly $9.99 million as of June 30.
The other settlement involves Dock Brasil Engenharia e Serviços S.A., a Brazilian shipyard and offshore-vessel repair company TriLinc partly financed with a $5.5 million loan in December 2018. A lost joint-venture contract and regional flooding hurt the business in 2024, prompting a shareholder-led sale process. TriLinc agreed in November 2025 to a settlement allocating it roughly $14.1 million of the eventual sale proceeds; the fund received a first installment of about $1.99 million in June, with the sale expected to close in the third quarter.
TriLinc Global Impact Fund is managed by TriLinc Advisors LLC, led by Gloria Nelund, chairman and chief executive officer.
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