Barry Sloane: Well, I think Chrispin as a BDC that look at the history. We’ve always had a fairly healthy in this space non-accrual number, because it’s just a function of these types of credits. On the other hand, you do get paid for making these types of loans with respect to the coupon and the government guarantee and the gain on sale. I think, when we look at the current environment. It’s amazing. The three and change weeks ago, people were thinking of rate cuts. Well, all of a sudden, three weeks later, they’re going through the rate cuts to rate hikes. And it’s like they went right through is there a middle ground? Like they raise rates a little bit more, they stop and hold it for a year or two, which is probably the likely scenario.
We do not see like a braking economy. We see a slowing economy. We see certain sectors performing better than others. But no, we’re not looking for — this is not ’08, ’09. There’s a lot of liquidity in the system. And our customer base has gotten a lot of support from EIDL loans, from PPP loans and ERC tax credits. And many of the individuals get government support as well. So we think our customer base is pretty liquid. And obviously, we are forecasting higher defaults that we’ve had historically, but we think we’re fairly well reserved. And when you take a look at our numbers going forward from a CECL perspective, we’ll have some pretty hefty reserves in that particular calculation when the loans are done on the bank using CECL. As a matter of fact, when you do CECL, which is one of the reasons why the numbers ramp, you get fairly — you get hit fairly heavily when you make the loan because then you have the lifetime accrual and you’re not putting the loans on the books at a premium anymore, you’re putting it on at par, which is different than fair value that we’ve experienced historically.
So hopefully, that gives you some background that answers your question.
Crispin Love: Yes, yes. Thanks, Barry. That’s helpful. But just one on the nonaccrual as a percent of loans at cost, curious if you have that number handy?
Barry Sloane: I don’t. I’d have to pull that out of the queue. It might be 1% or 2% higher than that number. We’ve written these down from a book perspective, that’s important to note, and from a taxable income perspective as a BDC.
Crispin Love: Great. Thank you, Barry. And I appreciate taking the questions.
Operator: And our next question comes from the line of Paul Johnson with KBW. Your line is now open.
Paul Johnson: Yes, good morning, Barry. Thanks for taking the question. So I just wanted to kind of clarify your comments as well as what’s in the slide in terms of what your expectations are on your expected return for the JV investments. You kind of talked about a 20% to 30% consolidated net return on the JV. Is that going to be — are we talking about the same thing as the return on your respective equity investments in the JVs? Or how should we be thinking about the return on those as you guys ramp that going forward?
