What collateral secures the note payable from the SBA obtained by Aw?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
was $51,502 and $51,502 respectively. These non-interest-bearing loans are unsecured and due on demand.
6. LOAN PAYABLE SBA
During 2020 the Company obtained a note payable of $25,900 from the US Small Business Administration (SBA). This note is collateralize
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the note payable of $25,900 that Aw obtained from the US Small Business Administration (SBA) in 2020 is collateralized by the assets of the company. The note bears interest at 3.75% with a term of 30 years. Monthly payments of $120 are scheduled to begin in 2023.
This means that if Aw defaults on the SBA loan, the SBA has a legal claim to Aw's assets to recover the outstanding debt. For a prospective franchisee, this indicates that Aw has encumbered its assets as collateral for the loan.
It is important to note that the financial health and debt obligations of the franchisor can impact its ability to support its franchisees. While the SBA loan provides capital for Aw, potential franchisees should consider how Aw's debt obligations might affect its long-term stability and its capacity to invest in franchisee support and development.